Sunak pours taxpayer cash into online betting firm

Rishi Sunak has sunk millions of pounds of taxpayer funds into an online betting company and a luxury Caribbean firm selling holidays on private islands as controversy over investments made by the Government’s £1.1bn startups scheme grows.

Taxpayer groups and gambling charities sounded the alarm over investments made under the Future Fund as criticism over wasteful Covid spending by the Chancellor mounts.

The scheme was designed to help innovative and fast-growing startups survive the pandemic, providing loans of up to £5m that could later be converted into shares. But details released by the British Business Bank this week revealed a number of controversial investments.

BetConnect, an online betting exchange vying to become the “next Betfair”, received a convertible loan worth almost £2m. The investment in a betting firm comes as the Government considers how to toughen up gambling laws following a review.

The startups scheme also sunk money into Edge Retreats, a firm offering wealthy holidaymakers the “world’s finest luxury villas”, including in the Caribbean, Italian lakes and Maldives. Villas and private islands on offer cost as much as £400,000 per week to rent.

The Future Fund was designed to support “innovative UK companies that typically rely on equity investment to fund their growth”, according to the British Business Bank, and was set up by the Government to oversee state-backed Covid support programmes.

It comes as Mr Sunak’s Covid business support schemes face increasing scrutiny as taxpayers are left on the hook for billions in loan losses, partly through fraud. Lord Agnew, a Cabinet Office minister, quit last week criticising the Government’s “lamentable track record” on tackling fraud.

Meanwhile, the British Business Bank has been accused by MPs on the Public Accounts Committee of “woefully inadequate” due diligence over Covid loans to Greensill Capital, the finance firm advised by David Cameron which collapsed last year.

Danielle Boxall of the TaxPayers’ Alliance, said: “As we emerge from the pandemic, ministers must ensure investment programmes like these deliver real value for money for taxpayers.

“While it can see some success, there are no guarantees with any investment.”

The Telegraph revealed on Wednesday that taxpayers now own a 8pc stake in Bolton Wanderers after the League 1 football club was handed a £5m convertible loan from the Future Fund. The investment raised questions about the eligibility criteria of the fund after the 145-year-old club was allowed access to startups aid.

A spokesman for Edge Retreats said: “As an innovative business in leisure travel, Edge Retreats was supported by this fund in 2020. This enabled the business to protect employment for its staff and to continue to grow as a business. We made no redundancies as a result. We have also grown and are able to continue to offer villa rental services.”

A British Business Bank spokesman said: “The Future Fund used a set of standard terms with published eligibility criteria. The process provided a clear, efficient way to make funding available as widely and as swiftly as possible without the need for lengthy negotiations. Applications that met all the eligibility criteria received investment.”

BetConnect did not respond to a request for comment. The Treasury declined to comment.