Cosy ties and £400,000 in political donations: why Labour has a gambling problem

In February 2020, with the race to succeed Jeremy Corbyn as Labour leader heating up, Keir Starmer’s office received a helping hand.

Peter Coates, the head of the dynasty behind Stoke-based online gambling company Bet365, donated £25,000 to Starmer’s office.

Coates and the Bet365 group had been regular donors to Labour until 2015, to the tune of £490,000, but the money dried up in the Corbyn years, when Bet365 turned its attention to stopping Brexit, handing £512,500 to the campaign for Britain to remain in the EU.

The donation was a clear sign that the gambling industry spigot could easily be turned on again.

Now, of the 12 most recent political donations by the industry and its executives, all have gone to Labour – a total of just under £400,000 stretching back to March 2020 – according to Electoral Commission records.

But that river of cash does not just indicate Labour’s position as the likely winner of the 4 July general election. It also illustrates the deep-rooted ties between the Labour party and the £11bn-a-year gambling sector.

In the past few weeks, revelations about bets apparently placed on the date of the election by Conservative politicians have prompted anger about an apparent problem with gambling infecting politics.

The furore has overshadowed the fact that, at the time the election was called, the Tory government was proceeding with its long-awaited white paper on gambling regulation.

With the future of those plans likely to be left in the hands of a Labour government, there are question marks over whether it is Labour, rather than the Conservatives, that has a gambling problem.

“The stage is set for a proper public health approach to gambling policy,” said Matt Zarb-Cousin, a gambling reform activist and former spokesperson for Corbyn. “The only thing stopping Labour going much further than the Tories on this issue will be the influence of the gambling lobby.”

In its manifesto, published in early June, Labour talked tough, declaring itself “committed to reducing gambling-related harm”.

That task, in extreme cases the difference between life and death, will most likely fall to Stephanie Peacock, the shadow gambling minister.

Her predecessor as Labour’s MP for Barnsley East, Michael Dugher, is now the chair of the industry lobby group, the Betting & Gaming Council (BGC).

He and Peacock appear to be close, regularly congratulating one another on each other’s political and personal achievements via social media.

The revolving door between Labour and the BGC does not stop at Dugher.

The lobby group has also employed the former Labour MP Anna Turley as a sports consultant, while its director of corporate affairs, Gary Follis, was an adviser to the erstwhile Labour shadow chancellor Ed Balls. Turley, who lost her Redcar seat in 2019, is campaigning to be re-elected in the north-east constituency.

Dugher remains close to his friend and former colleague Tom Watson.

As the Labour deputy leader, Watson regularly denounced the worst excesses of the gambling industry, calling for more stringent regulation.

Upon leaving politics, he took a job as an adviser to Paddy Power, a company he had previously denounced as both “dirty” and “money-grabbing” after it offered odds on the trial of Oscar Pistorius for the murder of Reeva Steenkamp.

Then there are those donations. Labour is not alone in taking money from gambling companies – the Done brothers behind Betfred gave £375,000 to the Tories in 2016 and 2017.

But most of the industry’s generosity has been bestowed on the party of opposition.

Since 2015, prominent Labour MPs have received nearly £30,000 from Red Capital Ltd, an investment vehicle owned by Jonathan Mendelsohn, the Labour peer.

He is also the chair of Evoke Holdings, which owns the William Hill, Mr Green and 888 gambling brands.

Recipients of Red Capital’s largesse include the shadow home secretary Yvette Cooper (£5,000) and the shadow health secretary Wes Streeting (£5,000). The party itself pocketed £14,500.

Richard Flint, a former chief executive of Leeds-based Sky Betting & Gaming, gave Labour £25,000 in 2021, as well as £10,000 to Rachel Reeves, the shadow chancellor and candidate for Leeds West who has held the seat since 2010.

Reeves also received £10,000 that year from Neil Goulden, then a director of Gamesys, the owner of Virgin Games and Rainbow Riches Casino.

Between them, gambling companies who have donated to Labour, or whose senior staff have done so, have paid out almost £40m to the Gambling Commission in the past three years for licence breaches including failure to protect problem gamblers.

These longstanding links have tended to fly under the radar, partly thanks to the often clumsy way in which Tories have cosied up to the industry.

Salutary tales for a government-in-waiting include Laurence Robertson and Philip Davies making tens of thousands of pounds through second jobs with the gambling sector.

The former Blackpool MP, Scott Benton, was caught last year by undercover reporters for the Times, posing on behalf of a fake investment fund, saying he would lobby ministers on behalf of the gambling industry and leak a confidential policy document for up to £4,000 a month.

But these characters are on the verge of becoming political footnotes, whereas Labour hopes to be the future.

“Recognising the evolution of the gambling landscape since 2005, Labour will reform gambling regulation, strengthening protections,” the party’s manifesto says.

The pledge does not tell the full story of how that landscape evolved.

It was Tony Blair’s government that gave birth to today’s permissive gambling regulatory environment in 2005.

When the invention of the smartphone made the legislation obsolete almost overnight, Labour failed to adapt to the technological reality: a supercasino in every pocket.

During the long period leading up to the white paper, Carolyn Harris, the Labour candidate for Swansea East who has served the constituency since 2010, has been one of few in Labour advocating for tougher regulation.

The Conservative government, by contrast, has sought to put the genie back in the bottle somewhat through last year’s white paper.

Some of its proposals – caps on digital slot-machine stakes and financial risk checks – can proceed, overseen by the Gambling Commission. Others, however, require secondary legislation and must now be left up to Labour.

These include a statutory levy to fund addiction research, education and treatment, as well as the introduction of a new ombudsman.

The volume of gambling advertising in British society also remains an open question, one that campaigners said was wrongly omitted from the white paper.

Some observers have said they are wary of the tone of Labour’s manifesto pledge and what it means for unresolved regulatory questions.

“We will continue to work with the industry on how to ensure responsible gambling,” the party said, prompting a letter to the Guardian from academics concerned about industry influence.

Liz Ritchie, of the charity Gambling With Lives, hopes reformists will also get their foot in the door at Westminster.

She said: “We are very hopeful that a Labour government would listen to families bereaved by gambling suicide and learn from the catastrophic failures of regulation, public information and treatment that has characterised the industry-controlled system to date.”

Labour declined to comment further about its gambling policy plans or relationship with the industry.

But for those who believe that money buys influence, reformists appear to be on manoeuvres too.

Few people gave more to Labour last year than the little-known former casino entrepreneur Derek Webb. He has previously thrown his weight behind reform, including legal support for Gambling With Lives and the successful campaign to curb fixed-odds betting terminals (FOBTs).

Webb gave £300,000 to Labour in 2023, nearly as much as anything the party has had from gambling tycoons.

Peacock declined to comment.