The betting industry has threatened to divert a quarter of its funds to a gambling-related harm charity, the Guardian understands.
The four largest members of the Betting and Gaming Council have committed in the past to using GambleAware as the lead commissioner of any monies given to solve problems caused by its activities.
But sources at GambleAware said the charity was told in recent weeks by BGC that in the future, 25% of the funds would be retained for distribution directly to projects selected by Bet365, Flutter Entertainment, GVC Holdings and William Hill.
The industry-funded charity now decides how money is spent to combat gambling-related harm – be it for research, education and prevention, or treatment. In its latest 2020 funding announcement, BGC committed to using GambleAware as lead agent to spend £100m over four years to 2024 on projects of its choice.
BGC said its stance has not changed and that it will give them £110m by 2024, but sources at GambleAware said there has been a significant shift in plans for continuing to spend money to fight damage to the industry.
Former Tory leader Iain Duncan Smith said: “The fact that the BGC is making a unilateral decision to redirect 25% of future funds from GambleAware to fund its own chosen causes cannot make it any clearer why the statutory charge to fund research, education and treatment is absolutely essential .
“This scramble by the gambling industry to decide when, how much and where money is now being spent to deal with the damage it causes simply needs to stop.”
The threat comes as a government white paper on gambling is expected earlier this year. Those close to negotiating its content say the No 10 is actively considering introducing a statutory industry tax that would force companies to pay a certain amount into an independently managed central fund that could commission services.
It is understood that a statutory fee was not considered under Liz Truss but is now being considered by Rishi Sunak, which is the reason for the delay.
The gambling industry pays a voluntary levy to fund research, education and treatment (RET), but experts believe the rate must be legally binding. Gambling licenses are subject to an annual fee, but according to last year’s GambleAware analysis, the recommended rate of 0.1% of gross gambling income has never been reached. The industry disputes this.
Labor colleague Hilary Armstrong, who sits on the board of GambleAware, said: “I understand that for the next three years the gambling companies are proposing that they very much want the voluntary fee to continue, and about a quarter of what they give they will decide themselves, which organizations will support rather than passing it through GambleAware. So there is no responsibility. And there’s no transparency around, you know how that money is spent and if it’s effective.
GambleAware has been criticized for getting too close to the industry, for example by focusing educational programs on the idea of ”problem gambling”, which some believe is a key narrative pushed by the industry to divert attention from the addictive nature of the products it promotes. But the charity publicly supports the statutory fee, and experts believe BGC may be flexing its muscles by threatening to withdraw funds.
Will Prochaska, strategic director of the charity Gambling With Lives, which supports families whose relatives have died as a result of gambling-related suicide, said: “It’s not just about money, it’s about influence. The industry warns GambleAware that if they don’t comply with their line, funds will be removed. Any other charities that get a windfall at the GambleAware site will be rewarded for supporting the industry philosophy of individual responsibility.
“It would be outrageous if the tobacco industry controlled who runs smoking cessation campaigns, so why does the gambling industry have such power over who provides research, education or treatment for gambling related harm?”
Zoe Osmond, CEO of GambleAware, said: “As a leading charity dedicated to protecting people from gambling-related harms, GambleAware has long recognized the need and calls for a more sustainable, long-term solution to funding gambling-related harms. .
“The current system of voluntary donations is opaque and we hope the forthcoming Gambling White Paper will provide a much-needed committed and consistent approach to funding.”
A spokesperson for the Department for Digital, Culture, Media and Sport said: “We are determined to protect those most at risk from gambling-related harm and are working to finalize the details of our review. The White Paper will strengthen our regulatory framework to make it fit for the digital age.”
A spokesperson for BGC said the company had exceeded its original promise “and will deliver £110m to GambleAware by the end of March 2024”. They added: “The industry has no say in how these voluntary funds are spent by charities, nor does it seek them out. However, we are concerned that GambleAware refuses to publicly disclose how these funds were spent.
“GambleAware was never supposed to receive the entire RET fund, just a baseline of £100m over four years and our members are proud to support a number of initiatives in addition to this, such as the YGAM GamCare Young People’s Gambling Harm Prevention Program with an extra £10m .