Czech oligarch leading the charge to run the National Lottery has a ‘Bond villain’ past

Battle lines are being drawn in the contest to win the most lucrative Government contract on offer to the private sector – the ten-year deal to run the National Lottery.

Bidders, who started their presentations to the Gambling Commission last month, are eyeing the £78 million annual profits earned by Camelot, which has operated the Lottery since its launch in 1994.

Leading the charge to topple Camelot is the European gambling giant Sazka, owned by a Czech oligarch whose colourful ‘Bond villain’ back story is causing disquiet in some Government quarters.

Karel Komarek, who made his £3 billion fortune following the fall of Communism after Czechoslovakia’s Velvet Revolution in 1989, has established a joint venture through his oil business MND with a German subsidiary of Gazprom, the energy company owned by Vladimir Putin’s Russian state.

Komarek, 52, who started to build his business empire on the back of a loan from his father, a member of the Czech-Soviet regime, has bolstered his bid with a series of high-profile appointments, including Sir Keith Mills, deputy chairman of the 2012 Olympics, former Sainsbury’s boss Justin King and Lastminute.com founder Brent Hoberman.

It’s understood that the company disputes claims being made in Westminster that, as a sweetener, it has promised Tory MPs that a proportion of its revenues would be diverted to ‘levelling-up’ projects in their constituencies.

In 2003 it was reported that a private intelligence firm, Hakluyt, had produced a dossier on Karel Komarek and his father, containing strongly denied allegations. The scandal was likened in court to a James Bond plot. Komarek brought a libel case against the claims but it collapsed, with Komarek saying he was disappointed by the outcome. A source close to the tycoon said the accusations were part of a campaign to discredit him.

Also in the running for the contract, which runs from 2024, is the former adult magazine tycoon Richard Desmond, who cashed in his stake in the publisher of the Daily Mirror to help fund his pursuit of the licence. Mr Desmond, who once owned the Daily Express and Channel 5, revealed in accounts for his holding company Northern & Shell that he will spend up to £20 million on his bid. ‘I will make it bigger, better and British,’ the press baron has said. But he is considered an outsider in the race.

Bidders, who started their presentations to the Gambling Commission last month, are eyeing the £78 million annual profits earned by Camelot, which has operated the Lottery since its launch in 1994

Onlookers say his bid has been damaged by allegations that he used his influence as a Conservative Party donor to lobby the Housing Secretary to rush through a property development in East London last year.

Camelot has come under increasing scrutiny from MPs as it battles to renew its contract, with politicians expressing concern about the proportion of its revenues that it gives to good causes. Almost 27p in every pound of sales was returned to good causes at the start of the most recent licence in 2011, but this has now fallen to nearly 21p.

Alexander Stafford, Tory MP for Rother Valley, organised a letter from Conservative MPs ‘to highlight Camelot’s failings’, while Sir Iain Duncan Smith, vice-chairman of the all-party parliamentary group on gambling-related harm, has called for a ‘full review on what Camelot’s purpose is’.

A cross-party group of MPs also called for Ministers to consider action against the company, arguing that a move towards app-based games rather than the traditional draws risks worsening problem gambling and reducing the amounts given to good causes.

Camelot rebuts the criticism by arguing that the UK lottery has become one of the world’s most successful, raising £43 billion for good causes since 1994.