Ministers are poised to launch a crackdown on unlicensed casinos sponsoring British sports teams, amid criticism that a delay to the proposals has opened the door for offshore gambling firms to strike lucrative deals with Premier League clubs.

Progress with plans to kick unlicensed gambling operators out of football has stalled since February, when the Department for Culture, Media and Sport (DCMS) said a review would begin in spring.

The consultation will be launched this week, well-placed sources told the Guardian.

But a landmark sponsorship deal, signed during the delay, vindicated concern voiced by one of the UK’s largest licensed gambling firms.

Stella David, the chief executive of Ladbrokes owner Entain, wrote to the gambling minister, Baroness Twycross, in early June, urging the government to act fast because sponsorship agreements with unlicensed firms were “surely now being finalised”.

She was proved right within weeks, when Everton FC signed a three-year sleeve sponsorship deal with the controversial crypto casino Stake.com, ignoring guidance from the Gambling Commission urging clubs to think twice before pursuing such deals.

A senior industry source called on lifelong Everton fan Andy Burnham, a vocal critic of the gambling industry, to condemn the deal.

“Burnham became stridently anti-gambling when he became mayor of Manchester, but his own football club is taking money from an unregulated gambling company,” said the source.

“We face the prospect of our prime minister wearing an Everton shirt and becoming a billboard for a crypto casino, which would be outrageous.

“He should condemn the Everton deal in the strongest terms.”

Stake effectively surrendered its licence to operate in Britain last year, amid a regulatory review of practices, including apparent promotion of the brand by the porn actor Bonnie Blue.

Days later, the Gambling Commission put sports teams on notice that they and their executives could be liable for prosecution if they were found to have promoted unlicensed gambling businesses that transact with British consumers. Stake says it does not take bets in the UK.

However, the law does not prevent unlicensed casinos such as Stake – and a host of other brands that chiefly target football viewers in east Asia – from sponsoring British clubs.

The government consultation, due to be launched this week, will seek expert opinion on proposals to close that loophole.

The long-awaited review comes a month after the Entain boss issued her warning to Twycross, in a letter seen by the Guardian.

David said the delay “raises the real and imminent risk of football clubs interpreting the absence of government action as a green light to enter into new sponsorship agreements for next season.

“These deals are surely now being finalised.”

She called on the government to warn the Premier League that its member clubs’ sponsorship agreements might be cancelled mid-season, if the consultation results in a ban.

David also warned that some unlicensed casinos were illegally taking bets in the UK, claiming that they “profit international criminal networks, deprive the Treasury of tax revenues and have a detrimental effect on the wellbeing of UK consumers, especially the most vulnerable.”

Stake.com is one of the largest gambling companies in the world and there is no suggestion that David was referring to the company, or that it has committed any wrongdoing. The company did not return a request for comment.

Stake was at the centre of multiple controversies before it finally left the UK last year when its “white label” partner, TGP Europe, gave up its licence to operate.

It came after the Gambling Commission launched an investigation into why Stake’s branding appeared in a video shot by Bonnie Blue.

In the video, Bonnie Blue boasted of a stunt in which she tried to have sex with “barely legal 18-year-olds” in their first year at Nottingham Trent University.

Stake’s branding has also appeared on other viral videos on social media, including some featuring violence and other graphic images.

Stake has previously told the Guardian that it did not consent to the use of its logo and branding by these content creators.

The Guardian has previously revealed controversial practices by Australia-based Stake, including a promotion in which it offered a $10 “free” bet to anyone who wagered $5,000 in a week.

The revelation led to Everton telling the brand not to use club imagery as part of the promotion, although the wider commercial partnership continued.

A subsequent investigation by the Observer in 2022 uncovered concerns about the ease with which British customers were apparently able to bet with cryptocurrency on the site, despite crypto gambling being illegal in Britain.

At the time, the company said it adhered to rigorous anti-money laundering and safer gambling processes, and that it had shut down customers trying to gamble with cryptocurrency in the UK, who were bypassing controls by using virtual private networks (VPNs).

Stake previously sponsored the front of Everton shirts but 2026-27 will mark the start of a deal between the Premier League and the government, under which clubs agreed voluntarily to ban front-of-shirt deals with casinos and sports books, including licensed operators.

The measure has led to operators sponsoring shirt sleeves and training kits instead, while there has been no change to rules allowing advertising on pitchside hoardings.

A government spokesperson said: “It’s not right that unlicensed gambling operators can sponsor some of our biggest football clubs, raising their profile and potentially drawing fans towards sites that don’t meet our regulatory standards.

“That is why we are looking to ban unlicensed operators from sponsorship deals in British sport and our consultation on the matter will go live soon.”

Everton FC declined to comment. Andy Burnham did not return a request for comment.