There were raised eyebrows and scratched chins when Tom Watson, the former Labour deputy leader and active gambling industry reform lobbyist, announced he would be taking up a paid position at the Flutter Group, who own Paddy Power, Betfair and many other firms in the industry.
And now, barely a week later, a second senior figure from the Labour Party has confirmed he too will be taking up a position with a sector heavyweight.
Lord Mendelsohn, best known as being the lobbyist who aided Tony Blair in his rise to power, has this week been announced as the new chairman of the 888 Holdings Group.
This decision was perhaps less surprising than that of Watson, given that Mendelsohn has been actively involved in the sector for quite some time – Oakvale Capital, a corporate finance firm he co-founded, has invested and acted as an advisor to BetVictor, the Stars Group and Penn Gaming in the past.
“I am very excited to join the board of such a world-class gaming operator,” he said after his appointment was revealed. “888 is a company that I have long admired during my more than 20 years working with companies in the gaming and gambling industries.”
Who is Lord Mendelsohn?
Jonathan Mendelsohn was once a lobbyist who acted in the best interests of the PartyGaming firm, whose brands included Party Poker. His main role was to give governmental ministers a nudge in creating an agreeable environment for the sector.
He also hit the headlines when he lobbied MPs not to bring in a supermarket car park tax, which Tesco claimed saved them £40 million per year.
Because he’s in British politics, it wasn’t long before Mendelsohn ran into controversy, and that came in 1998 when he was caught on tape telling an undercover reporter that he could ‘sell’ access to MPs to business clients – the fallout from ‘Lobbygate’ caused government to look closer at how lobbyists were allowed to conduct themselves in office.
For the next decade or more he became a key figure in the Labour administrations of Tony Blair and Gordon Brown, and in 2013 plain old Jonathan became Baron Mendelsohn after being handed a life peerage. He would later be named the business and international trade spokesman in the House of Lords.
But five years later he was asked to step down following a Presidents Club dinner, at which a number of female guests make accusations of sexual harassment and assault. Mendelsohn was not involved but had attended the event as the President.
Can Politics and Gambling Be a Happy Marriage?
Having officially been unveiled in an announcement to the London Stock Exchange, Mendelsohn will replace 888’s former chief executive and current chairman Brian Mattingley.
Mattingley himself has been a controversial figure at the head of the firm, and at the 2019 annual general meeting he survived a vote of no confidence that saw more than 20% of voters oppose his re-election as the brand’s chair.
So that’s now two senior political figures heading up gambling companies in an advisory capacity….coincidence, or a sign of a clear shift in the industry?
Clearly, there is an emphasis on gambling firms operating in a more responsible manner without forgetting their commercial interests, and Tom Watson – something of an activist against problem gambling and inappropriate behaviour in the industry – is a clear sign that Flutter are taking societal issues seriously.
And Mendelsohn has a bumper book of contacts within politics, and he has the kind of network that will help 888 Holdings maximise their position.
Of course, the spectre of the Gambling Act 2005 being reviewed and, quite probably, changed would suggest that Flutter and 888 have taken a pre-emptive position – they are trying to show ministers that they are taking their requirements to be more socially responsible seriously.
Lockdown has increased the numbers of people gambling online, and with MPs suggesting that the Gambling Act is ‘not fit for the digital age’ there is likely to be something of a clampdown incoming.
It will be interesting to see how Mendelsohn and Watson use their political past for their new employers’ future gain….