Betting firms’ surprise decision to redirect £100m of funds for tackling problem gambling proves the industry has too much influence on how the money is spent, politicians and leading addiction experts have warned. Bet365, the Ladbrokes owner GVC, William Hill, Flutter and SkyBet pledged the cash in July last year, a move widely seen as a response to calls for a mandatory 1% levy on their income to fund addiction research, education and treatment. The companies appeared to have agreed to route the money via Action against Gambling Harms (AGH), a charity founded by the Conservative peer Lord Chadlington to identify suitable recipients and hand out grants. But in an unexpected change of heart, industry trade body the Betting and Gaming Council (BGC) revealed this month that all of the cash will go to the GambleAware charity instead. In an open letter to the culture minister, Oliver Dowden, and the health secretary, Matt Hancock, experts will say this week that the decision underlines why a statutory levy is needed. “There is considerable concern that the existing system creates significant opportunities for [gambling firms] to influence this agenda,” they will say. “Irrespective of which organisation funds are given to, the BGC’s announcement exemplifies the long-standing weakness of a funding system that allows the gambling industry to regulate the availability and distribution of vital funds to address gambling harms. “Increases in funding first promised […] nearly one year ago have yet to materialise and the industry has now demonstrated its willingness and ability to change the direction of funding at short notice.” The group of more than 40 academics and addiction experts want a mandatory levy, with the proceeds distributed via established independent bodies such as UK Research and Innovation and the National Institute for Health Research. Dr Heather Wardle, of the London School of Hygiene and Tropical Medicine, said: “This situation whereby the industry controls who to fund, when to fund and what the level of funding should be is untenable.” AGH, which was widely expected to administer the £100m, is understood to have been blindsided by the industry’s snub. In December last year, AGH published an update in which the five gambling firms said they had asked Lord Chadlington to assemble a committee to administer funds and were “committed” to enacting its recommendations. The BGC told the Guardian its members had decided to give the money to GambleAware after discussions with the Department for Digital, Culture, Media and Sport (DCMS). “While Lord Chadlington was asked by the largest operators to conduct a review into funding gaps, it was Lord Chadlington himself who decided that he wanted any additional money to go to his own body, despite the fact that they are not in any way equipped at this stage to carry out research, education and treatment (RET) of problem gambling,” said the BGC. “As his organisation is not yet even approved by the regulator, the Gambling Commission, to do RET, we simply could not have given them the RET funding.” However, the firms said at the time they wanted AGH to to “direct, monitor and evaluate” spending. The charity planned to distribute the money, not to perform its own research, education and treatment. A source close to the charity said it was “independent of gambling companies and they’ve decided not to give the money to us”. The source added: “People who’ve accepted money from GambleAware in the past say they believe it’s not independent any more.” The GambleAware chair, Kate Lampard, said the charity “has a proud record as an independent charity commissioning national prevention and treatment services underpinned by research and evaluation”. But politicians in both houses said that, regardless of the recipient of the funding, the industry’s apparent control over its destination was concerning. The Lord Bishop of St Albans submitted a written question on Tuesday asking for an explanation of the decision and whether the government was involved in it. The Labour MP Carolyn Harris, who chairs a cross-party group of MPs advocating much stricter regulation of gambling, said: “The transfer of this money […] seriously brings into question the integrity and independence of the work and research that will be done with this money.” A spokesperson for DCMS said: “We have welcomed the commitment to spend £100 million on research, education and treatment and will monitor closely the progress of these new measures and continue to encourage the wider industry to step up. “It is a voluntary agreement and we were clear that the money must be spent independently of the companies and exclusively focused on reducing gambling related harm.”