Flutter’s acquisition of Sisal creates conflict of interest for Allwyn adviser Justin King

1. Justin King, the former chief exec of supermarket group Sainsbury’s, is a paid adviser to Allwyn, one of the four gambling operators bidding for the fourth licence to run the UK National Lottery.
2. Mr King also chairs Made By Sport, a grassroots sport charity that is a “strategic partner” of Allwyn (see 13 November 2021 post).
3. The charity is linked to another gambling firm, Flutter Entertainment PLC (“Flutter”), a member of the FTSE 100 whose brands include Paddy Power, Betfair, Sky Bet and PokerStars.
4. On 17 March 2021, I reported that Made By Sport had accepted a large donation – £4.79m – from Flutter. In April 2021, Mr King as Made By Sport chair wrote a newspaper article with the Flutter chief executive, Peter Jackson, to mark the two organisations working together (see 2 April 2021 post).
5. On 23 December 2021, Flutter announced its £1.6bn acquisition of Sisal, the Italian-based gambling operator that is another bidder for the next licence to run the UK National Lottery. Sisal’s bid is in conjunction with Barnardo’s, the leading children’s charity.
6. Flutter’s takeover of Sisal creates a conflict of interest for Allwyn adviser Mr King in relation to the Gambling Commission’s competition to select the operator of the fourth licence to run the UK National Lottery. Here Allwyn and Sisal are competing against each other. (The other two bidders are incumbent Camelot (see 16 August 2021 post) and Richard Desmond, the media magnate who already owns the Health Lottery.)
7. What’s more, Allwyn operates in Italy: it’s been “been involved with [lottery] LottoItalia since 2016” (screen shot in Figure 1). Sisal is headquartered in Milan: Italy is its most important market by far.

Figure 1. Allwyn website: Allwyn operates in Italy dated 25 December 2021

Camelia Botnar Arterial Research Foundation: Keeping it in the family

1. Lord Stephen Greenhalgh, minister of state for building safety and fire, has been a trustee of medical charity the Camelia Botnar Arterial Research Foundation (“CBARF”) since 2006, according to the parliament website.
2. In its latest accounts, made up to 31 July 2020, CBARF details its charitable activities of the reporting year. There are three paragraphs.
3. First, CBARF says: “The charity has continued to successfully fund medical research that has completed studies and published articles on rupture rates of small abdominal aortic aneurysm as well as on the rare [sic] and predictability of graft rupture after endovascular and open abdominal aortic aneurysm repair.”
4. It continues: “The work carried out in previous years through funding by the Foundation on three-dimensional imaging of scans for aortic aneurysm was successfully published in the European Journal of Vascular and Endovascular Surgery.”
5. CBARF finishes: “The policy remained to take out only seed money and not to fund major research efforts.”
6. Meanwhile, what did the charity get up to the previous year? Well, CBARF is evidently a fan of reuse: the accounts made up to 31 July 2019 contain the same three paragraphs.
7. What’s more, the same three paragraphs appear, too, in the 2018, 2017 and 2016 accounts!
8. Then the trustees of CBARF deserve scrutiny. There are four, with Lord Greenhalgh’s father, Prof Roger Greenhalgh, a vascular surgeon, as chair.
9. Father and son are joined by Nick Botterill, a Conservative councillor on Wiltshire Council. Previously, Mr Botterill was leader of the council in London Borough of Hammersmith & Fulham – he succeeded the then Mr Stephen Greenhalgh in the role in 2012, when the latter was appointed deputy mayor for policing and crime in London by mayor Boris Johnson. Mr Botterill and Mr Greenhalgh were Conservative councillor colleagues in Hammersmith & Fulham, therefore. Cosy!
10. At first glance, the fourth trustee, Nick Bence-Trower, appears to be independent. Mr Bence-Trower is a former senior executive at Cazenove Capital Management, according to his LinkedIn page (screen shot in Figure 1).

Figure 1. Nick Bence-Trower: LinkedIn page at 25 November 2021

11. Yet Cazenove Capital Management is shown as “investment advisers” in the CBARF accounts for the last five years.
12. In fact, at 1 July 2017 Mr Bence-Trower was “portfolio director” in the Cazenove charities team (screen shot in Figure 2). For the avoidance of doubt, he was appointed as a trustee of CBARF on 16 September 2020.

Figure 2. Nick Bence-Trower: “portfolio director” in the Cazenove charities team at 1 July 2017

13. A third concern about CBARF is the academic institutions to which it awards grants. Or academic institution – it appears to be only one in practice: Imperial College School of Medicine.
14. By happy chance, Prof Greenhalgh is “also the head of the Vascular Research Group at Imperial College School of Medicine”, according to the “related-party transactions” note in the latest accounts. The note adds that Prof Greenhalgh “receives no personal financial benefit from the grants”.
15. It’s a matter of public record that Prof Greenhalgh is actually head of the Vascular Surgery Research Group at Imperial. For some reason, the 2020 accounts don’t even name his research group correctly. The same error is made in the accounts for the previous four years.
16. The trustees “meet annually to approve grant applications”, say the latest accounts. Nevertheless none of Lord Greenhalgh, Mr Botterill or Mr Bence-Trower has relevant medical research expertise to assess the grant applications. Here it’s difficult to see Prof Greenhalgh not getting his way.
17. CBARF hasn’t disclosed a website on the public charity register (screen shot in Figure 3); and nor could I find one. The absence of a website is surprising: a website could promote the charity and its funding opportunities.

Figure 3. The Camelia Botnar Arterial Research Foundation: contact information at 25 November 2021

18. The address, phone number and email address for CBARF on the register are those for BIBA Medical Ltd, a firm with two directors – Prof Greenhalgh and Lord Greenhalgh. Father and son also own the company.
19. The latest accounts for CBARF show the charity paid “administrator fees” to BIBA Medical Ltd for £2 371 (2019 – £5 283).
20. Lord Greenhalgh, who is unpaid as a minister, didn’t respond to requests for comment.

Excessive fundraising costs at Steven Gerrard’s charity

1. A children’s charity set up in 2011 by Steven Gerrard had excessive fundraising costs in four of the last five years for which accounts are publicly available. The former England footballer, who used to play for Liverpool in the Premier League, has been a trustee of the Steven Gerrard Foundation (“SGF”) from the beginning. Its reporting year coincides with the calendar year.
2. In 2016, income was £20.18k, while fundraising costs were £19.07k. Therefore, the latter were an astonishing 94.50 per cent of the former.
3. The next year, meanwhile, fundraising costs of £202.23k represented 62.87 per cent of income (£321.68k).
4. 2018 was a quiet year: income was only £1.35k, with nothing spent on fundraising.
5. In 2019, the charity pulled in £291.77k, with fundraising costs of £198.70k – 68.10 per cent of income.
6. Finally, the COVID-19 pandemic meant 2020 was another quiet year: income was just £6.70k, with £3.00k going on fundraising – 44.77 per cent of income.
7. SGF, a grant-making charity, raises most of its money by holding high-profile fundraising events that are led by the eponymous founder. In each of the last five years of accounts, the events are listed as “golf days, dinners and auctions”.
8. For the avoidance of doubt, all fundraising incurs costs for charities. The question is whether the fundraising costs are reasonable or not.
9. There’s no suggestion of unauthorised personal benefit by Mr Gerrard or the other two trustees. Nor is there any suggestion that anyone has done anything illegal.
10. On 11 November 2021, Mr Gerrard was appointed as manger of Aston Villa in the Premier League, quitting as manager of Rangers in Scotland for the role.
11. SGF didn’t respond to requests for comment.

Response from the Gambling Commission

1. When asked for comment on my previous post, a spokesperson for the Gambling Commission said in an email: “We do not talk about individuals or operators.”
2. The regulator continued: “Operators must follow strict rules that require gambling to be socially responsible. Operators are responsible for the actions of third parties, including their marketing affiliates. Although we do not regulate affiliates, we encourage operators and the affiliate industry to work together to raise standards and ensure gambling does not harm consumers.”
3. The commission finished: “It is an offence [under section 330 of the Gambling Act 2005] to advertise unlawful gambling. Where we see individuals or companies illegally interacting with British consumers we take action to close them down.”
4. Meanwhile, trade body the Betting and Gaming Council didn’t respond to a request for comment.

William Hill chief executive chairs affiliate that markets unlicensed gambling operators

1. Ulrik Bengtsson, the chief executive of gambling giant William Hill, is also chair of the board at an affiliate that markets unlicensed (black-market) gambling operators.
2. I first came across Betpal in the list of official supporters of Safer Gambling Week 2021, a joint campaign run each year by three UK gambling trade bodies to promote safer gambling (screen shot in Figure 1). Beginning in 2017 as Responsible Gambling Week (see 13 February 2018 post), this year the campaign ran 1-7 November.

Figure 1. Safer Gambling Week 2021 website: Betpal is official supporter dated 1 November 2021

3. Betpal isn’t a gambling operator; rather, it’s a gambling affiliate. Thus Betpal markets gambling operators. Unlike operators, affiliates aren’t licensed by the Gambling Commission, the UK gambling regulator.
4. One problem with Betpal is its opacity. There’s no company information at the foot of the website (screen shot in Figure 2).

Figure 2. Betpal website: no company information dated 1 November 2021

5. What exactly is Betpal? There’s no company with that name registered at Companies House. If Betpal is a trading name of a registered company, this should be made clear. What is the registered company number? Country of registration?
6. This opacity is unsatisfactory.
7. Meanwhile, the Betpal website links to the GAMSTOP website, and uses the GAMSTOP logo (Figure 2). GAMSTOP is a self-exclusion scheme for online gambling in the UK. A free service, users register at a single website to self-exclude from online gambling services run by operators licensed by the Gambling Commission (see 9 April 2021 post).
8. I asked GAMSTOP two questions in an email. First, is GAMSTOP happy for Betpal to link to the GAMSTOP website this way? Second, has GAMSTOP permitted Betpal to use the GAMSTOP logo?
9. Answering the first question, Katie Reynolds-Jones, head of marketing and communications at GAMSTOP, said in a written statement: “We are happy with any organisation who wishes to link to the Homepage of our website, provided they do so in a fair and legal way. As you will be aware, all UK licensed operators are required to provide a link to our website and Affiliates promoting these sites are also recommended to promote GAMSTOP as part of their Safer Gambling Messages.”
10. While GAMSTOP hadn’t “specifically” permitted use of its logo by Betpal. It added: “… but if one person visiting their site sees the link and realises that GAMSTOP could be what they need to help them with an issue with gambling then this has got to be a good and positive thing and we see no reason to remove this possibility.”
11. By reply, I expressed surprise at how relaxed GAMSTOP appears to be about both Betpal linking to the GAMSTOP website this way and its use of the GAMSTOP logo. I also said I was surprised that the opacity of Betpal doesn’t seem to be a concern for GAMSTOP.
12. Further, is GAMSTOP sure Betpal isn’t marketing any unlicensed gambling operators? Would GAMSTOP be happy for an affiliate promoting black-market operators to use the GAMSTOP logo?
13. In short, has GAMSTOP done adequate due diligence on Betpal?
14. In response, Ms Reynolds-Jones wrote: “We appreciate your concerns around Betpal but have nothing to add to our last email. Our belief is that organisations promoting licensed gambling sites who are linking to GAMSTOP’s service are doing a positive thing as people will see the logo and those who need help with their gambling may then be prompted to get it.”
15. I then decided to determine whether Betpal is marketing any unlicensed gambling operators. I quickly discovered that the affiliate is doing such.
16. Thus I quickly found a current promotion for 4 Crowns Casino, which isn’t licensed by the Gambling Commission (screen shots in Figures 3-4).

Figure 3. Betpal website: promotion for unlicensed gambling operator 4 Crowns Casino (top of page) dated 22 November 2021

Figure 4. Betpal website: promotion for unlicensed gambling operator 4 Crowns Casino (bottom of page) dated 22 November 2021

17. It isn’t necessary to look for further black-market operators on the Betpal website. One is bad enough.
18. This time GAMSTOP didn’t respond to requests for comment.

Figure 5. Betpal website: the “team” dated 1 November 2021

19. So who is behind the opaque Betpal? The website fails to disclose the full names of the alleged staff: first names only are shown (screen shot in Figure 5). However, clicking the “bio” link for “Niklas” reveals an email address: niklas.forsberg@raketech.com. Thus the “sales guru” appears to work for Raketech, an affiliate based in Malta. (At date of publication the “bio” for “Niklas” is the only one to include a personal email address.)

Figure 6. Raketech website: Niklas Forsberg is “head of sales” dated 1 November 2021

20. Niklas Forsberg is “head of sales” at Raketech, according to the website (screen shot in Figure 6). Ulrik Bengtsson is chair of the board of directors (screen shot in Figure 7).

Figure 7. Raketech website: Ulrik Bengtsson is chair of the board of directors dated 1 November 2021

21. Another of Mr Bengtsson’s roles is chief executive of William Hill, one of the largest members of the Betting and Gaming Council (“BGC”). Established in 2019, trade body BGC represents “over 90% of retail betting shops, online betting and gaming operators, casinos and bingo operators” in the UK.
22. BGC – slogan: “championing industry standards” – loudly proclaims its members come only from the regulated betting and gaming industry: all are licensed by the Gambling Commission. BGC regularly warns anyone and everyone of the dangers of using black-market operators.
23. However, Betpal demonstrates two ways in which the separation between the regulated and unregulated gambling industry is blurred, despite what BGC claims.
24. First, Betpal markets both licensed and unlicensed gambling operators. It’s a clear due diligence failure by the former to share an affiliate with the latter. (The licensed operators promoted by Betpal include William Hill, Bet365, Sky Bet, Paddy Power and many others.)
25. Worse, the Gambling Commission has said it will hold licensees responsible for the activities of the affiliates with whom they work. The Licence Conditions and Codes of Practice (“LCCP”) set out the requirements all licensees must meet in order to hold a Gambling Commission licence. LCCP Social responsibility code provision 1.1.2 states: “Licensees are responsible for the actions of third parties with whom they contract for the provision of any aspect of the licensee’s business related to the licensed activities.”
26. Second, the chief executive of William Hill, one of the largest licensed gambling operators, chairs Raketech, the affiliate behind the Betpal brand. This link via Mr Bengtsson only damages the reputation of William Hill.
27. BGC is one of the three trade bodies responsible for the Safer Gambling Week campaign (the other two are the Bingo Association and the British Amusement Catering and Trade Association). That Safer Gambling Week 2021 accepted Betpal as an official supporter is another due diligence failure and only undermines the credibility of the campaign.
28. Betpal didn’t respond to requests for comment. Nor did William Hill.