Question to the Department for Digital, Culture, Media & Sport:

To ask the Secretary of State for Digital, Culture, Media and Sport, whether the Gambling Commission takes into account potential national security implications when awarding National Lottery licences.

Answered by Damian Collins

The process of awarding the licence to run the National Lottery is governed by the National Lottery etc. Act (1993)​​. Under the Act, the Gambling Commission has a duty to ensure that any person who either runs or benefits from the running of the National Lottery is fit and proper and that the Licensee’s operation meets high standards of propriety. The award of the licence is distinct from an acquisition - at no point is the operator appointed to run the lottery the owner of the National Lottery as an asset. The 4th National Lottery licence is due to begin in 2024.

During the competition to run the 4th National Lottery licence, the Commission carried out fit and proper tests on all 4 final stage applicants. Fit and proper checks examine the identity, integrity, criminality and financial standing of those who run, or benefit from running, the National Lottery, or are applying to do so. As part of its duties under the Act, the Commission cannot award the licence unless it is satisfied that the proposed licensee is fit and proper. The Commission is also required to revoke a licence if it becomes satisfied that the licensee is no longer, or indeed never was, fit and proper.

Following the Russian invasion of Ukraine, the Gambling Commission, as a responsible regulator, sought assurances that none of the final stage applicants were impacted by sanctions against the Russian regime. The Commission was satisfied that this was the case.

In addition, following the announcement of Allwyn as the preferred applicant in March 2022, standard vetting checks (Baseline Personnel Security Standard or BPSS level) are being carried out as planned, on behalf of the Commission, by UK Security Vetting on key people connected with the proposal. These include Qualifying Direct Shareholders, which is any person who holds at least 5% interest in the licensee. Full details of what is included in a BPSS level check is outlined on the UKSV website.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has had discussions with the (a) Secretary of State for Digital, Culture, Media and Sport and (b) Gambling Commission on the implications of the fourth National Lottery licence on levels of (a) Lottery Duty and (b) returns to good causes.

Answered by Simon Clarke

The Fourth National Lottery Licence Competition was an independent process run by the Gambling Commission. The Treasury engaged with senior officials from the Department for Digital, Culture, Media and Sport and the Gambling Commission regarding the Competition as it progressed. HMRC monitor receipts from specific betting and gaming duties, including Lottery Duty.

Question to the Department for Digital, Culture, Media & Sport:

To ask the Secretary of State for Digital, Culture, Media and Sport, what steps the Gambling Commission took to vet national lottery license applicants during the national lottery license application process, including whether they communicated with and sought assurances from UK and other financial regulators, and UK and other security and police services.

Answered by Chris Philp - Minister of State (Home Office)

The competition to operate the 4th National Lottery licence is run by the Gambling Commission. In accordance with the relevant legislation, the decision to appoint Allwyn as the preferred bidder was made by the Commission’s Board. DCMS and Ministers have not been involved in the decision making process, nor have they discussed or corresponded with the Commission about who the licence should be awarded to.

We do not have any plans to publish correspondence between the Department and the Gambling Commission.

It is the Gambling Commission’s responsibility to regulate the National Lottery and appoint a licensee that will operate the National Lottery with all due propriety. To satisfy this duty, fit and proper checks were carried out during the competition and will be maintained throughout the transition and licence term. These checks consider the identity, integrity, criminality and financial integrity of those operating or benefitting from the National Lottery (or applying to do so) and include enhanced Disclosure and Barring Service checks. Where an individual was based overseas, checks were carried out against information provided by the relevant police report. In addition, the Commission reviewed the funding structures for all applicants, including Allwyn, and is satisfied that no sanctioned entities are involved in funding the proposed licensee.

Standard vetting checks (BPSS level - Baseline Personnel Security Standard) are being carried out by UK Security Vetting on key people connected with the preferred applicant’s proposal. These include Qualifying Direct Shareholders, which is any person that holds at least 5% interest in the Licensee. This vetting process has already started and is expected to take 8 – 10 weeks to complete. Full details of what is included in a BPSS level check is outlined on the UKSV website.

Question to the Department for Digital, Culture, Media & Sport:

To ask the Secretary of State for Digital, Culture, Media and Sport, what steps she has taken to ensure that the National Lottery License Competition is conducted in accordance with the National Lottery Act 1993 and without political interference.

Answered by Chris Philp - Minister of State (Home Office)

The Gambling Commission is responsible for running the competition for and awarding the next licence to run the National Lottery. DCMS has worked with the Commission on the design of the licence, but is not involved with the competition process or selection of the winning bidder.

Under the National Lottery etc Act 1993, the government shares three statutory duties with the Gambling Commission, to ensure the National Lottery is run with all due propriety, that the interests of every participant are protected, and - subject to those duties - that returns to good causes are maximised. The competition is being run in accordance with these duties.

Question to the Department for Digital, Culture, Media & Sport:

To ask the Secretary of State for Digital, Culture, Media and Sport, with reference to the involvement of CVC Capital in the bid by Sisal S.p.A for the National Lottery Licence, whether his Department has plans to introduce measures to ensure that (a) CVC Capital upholds obligations to Debenhams pension fund and (b) National Lottery funds will not be used to pay dividends to CVC Capital partners.

Answered by Chris Philp - Minister of State (Home Office)

The competition for the next licence to run the National Lottery is run by the Gambling Commission. Government is not involved in selecting the winning bid. The Commission has received four final applications to run the licence. This is the highest number of applications received since the first licence was awarded in 1994 and reflects the strength of the competition, and the market’s recognition of the opportunity which exists.

While the competition remains on-going it is not appropriate to comment on whether an individual, or organisation, has participated in any stage of it. We have no plans to publish any correspondence received by the Department from either CVC Capital Group or Sisal partners.

As part of the Department’s public appointments process, applicants to public bodies roles, including to the Gambling Commission’s board, must declare in their application any private interests which would result in actual, potential or perceived conflicts of interest. On taking up an appointment to the Gambling Commission, Commissioners are required to adhere to principles in Nolan Principles and the Gambling Commission’s own Code of Conduct for Commissioners. Further to this:

1. All Commissioners are required to declare interests at least annually, and ensure in year changes are notified as necessary;

2. Their interests are published on the Gambling Commission’s website;

3. Declarations of interest are sought at the beginning of every board and committee meeting; and

4. When an interest is declared, it is reviewed by the Head of Governance and the Chair of the Commission to identify if any action is required as a result (up to and including asking my Department to terminate the appointment/asking them to terminate their interest).

The purpose of the National Lottery, as set out in legislation, is to raise monies for the four good cause pillars. The National Lottery must be run by a single purpose vehicle, with controls in place to ensure that proceeds cannot be diverted to another area of the operator’s business. The mechanism by which proceeds are divided between good cause returns and profits will be set out in the licence while decisions about the use of their profits will be a matter for the operator.

Defined benefit pension schemes are an important source of retirement income for many people in the UK, and the Government is committed to ensuring that they are protected. Whilst it is not appropriate for Ministers to comment on the arrangements of particular pension schemes, the Pensions Regulator monitors private Defined Benefit pension schemes and has the powers to act where they believe a breach of the law has taken place. The Government is committed to strengthening the powers at the disposal of the Regulator and new sanctions, within the Pension Schemes Act 2021, will strengthen the punishment for irresponsible management of pension schemes.

Question to the Department for Digital, Culture, Media & Sport:

To ask the Secretary of State for Digital, Culture, Media and Sport, what processes are in place to ensure that members of the Board of Commissioners have no conflict of interest pertaining to the Fourth National Lottery Licence process.

Answered by Chris Philp - Minister of State (Home Office)

The competition for the next licence to run the National Lottery is run by the Gambling Commission. Government is not involved in selecting the winning bid. The Commission has received four final applications to run the licence. This is the highest number of applications received since the first licence was awarded in 1994 and reflects the strength of the competition, and the market’s recognition of the opportunity which exists.

While the competition remains on-going it is not appropriate to comment on whether an individual, or organisation, has participated in any stage of it. We have no plans to publish any correspondence received by the Department from either CVC Capital Group or Sisal partners.

As part of the Department’s public appointments process, applicants to public bodies roles, including to the Gambling Commission’s board, must declare in their application any private interests which would result in actual, potential or perceived conflicts of interest. On taking up an appointment to the Gambling Commission, Commissioners are required to adhere to principles in Nolan Principles and the Gambling Commission’s own Code of Conduct for Commissioners. Further to this:

1. All Commissioners are required to declare interests at least annually, and ensure in year changes are notified as necessary;

2. Their interests are published on the Gambling Commission’s website;

3. Declarations of interest are sought at the beginning of every board and committee meeting; and

4. When an interest is declared, it is reviewed by the Head of Governance and the Chair of the Commission to identify if any action is required as a result (up to and including asking my Department to terminate the appointment/asking them to terminate their interest).

The purpose of the National Lottery, as set out in legislation, is to raise monies for the four good cause pillars. The National Lottery must be run by a single purpose vehicle, with controls in place to ensure that proceeds cannot be diverted to another area of the operator’s business. The mechanism by which proceeds are divided between good cause returns and profits will be set out in the licence while decisions about the use of their profits will be a matter for the operator.

Defined benefit pension schemes are an important source of retirement income for many people in the UK, and the Government is committed to ensuring that they are protected. Whilst it is not appropriate for Ministers to comment on the arrangements of particular pension schemes, the Pensions Regulator monitors private Defined Benefit pension schemes and has the powers to act where they believe a breach of the law has taken place. The Government is committed to strengthening the powers at the disposal of the Regulator and new sanctions, within the Pension Schemes Act 2021, will strengthen the punishment for irresponsible management of pension schemes.

Question to the Department for Digital, Culture, Media & Sport:

To ask the Secretary of State for Digital, Culture, Media and Sport, what steps she is taking to ensure that political donations made to the Conservative Party by managing parties of CVC Capital, the owner of Sisal S.p.A Group do not influence the Government's approach to the Fourth National Lottery Licence.

Answered by Chris Philp - Minister of State (Home Office)

The competition for the next licence to run the National Lottery is run by the Gambling Commission. Government is not involved in selecting the winning bid. The Commission has received four final applications to run the licence. This is the highest number of applications received since the first licence was awarded in 1994 and reflects the strength of the competition, and the market’s recognition of the opportunity which exists.

While the competition remains on-going it is not appropriate to comment on whether an individual, or organisation, has participated in any stage of it. We have no plans to publish any correspondence received by the Department from either CVC Capital Group or Sisal partners.

As part of the Department’s public appointments process, applicants to public bodies roles, including to the Gambling Commission’s board, must declare in their application any private interests which would result in actual, potential or perceived conflicts of interest. On taking up an appointment to the Gambling Commission, Commissioners are required to adhere to principles in Nolan Principles and the Gambling Commission’s own Code of Conduct for Commissioners. Further to this:

1. All Commissioners are required to declare interests at least annually, and ensure in year changes are notified as necessary;

2. Their interests are published on the Gambling Commission’s website;

3. Declarations of interest are sought at the beginning of every board and committee meeting; and

4. When an interest is declared, it is reviewed by the Head of Governance and the Chair of the Commission to identify if any action is required as a result (up to and including asking my Department to terminate the appointment/asking them to terminate their interest).

The purpose of the National Lottery, as set out in legislation, is to raise monies for the four good cause pillars. The National Lottery must be run by a single purpose vehicle, with controls in place to ensure that proceeds cannot be diverted to another area of the operator’s business. The mechanism by which proceeds are divided between good cause returns and profits will be set out in the licence while decisions about the use of their profits will be a matter for the operator.

Defined benefit pension schemes are an important source of retirement income for many people in the UK, and the Government is committed to ensuring that they are protected. Whilst it is not appropriate for Ministers to comment on the arrangements of particular pension schemes, the Pensions Regulator monitors private Defined Benefit pension schemes and has the powers to act where they believe a breach of the law has taken place. The Government is committed to strengthening the powers at the disposal of the Regulator and new sanctions, within the Pension Schemes Act 2021, will strengthen the punishment for irresponsible management of pension schemes.