A successful gambler should not be deprived of the fruits of his bet, but equally in my judgment a losing gambler should not be able to escape the consequences of his decisions. (Paragraph 181, Mr Lee Gibson v TSE Malta LP (t/a Betfair))
In a landmark decision earlier this month, the High Court has confirmed that operators do not generally owe their customers a duty of care under any of the multiple mechanisms tested out in this case.
Mr Lee Gibson v TSE Malta LP (t/a Betfair) [2024] EWHC 2900 (Comm)).
Mr Gibson issued a claim against Betfair, a betting exchange platform, for his losses of up to £1.4 million. His case was predicated on the fact he was a problem gambler and, as Betfair was and is a Gambling Commission licensed operator, they breached the terms of their licence by allowing him to gamble.
HHJ Bird made a number of interesting comments in the Judgment, with a focus on the operations of Betfair and whether they did enough to satisfy the conditions on their licence. A number of serious legal questions were also asked, which I will come to later.
This is a very fact specific case, however several of its elements are applicable to a number of operators and it is well worth a read.
Social Responsibility and the Defendant
Crucially, the Judgment begins by stating ‘If he was not a problem gambler, or if Betfair cannot be taken to have been aware that he was a problem gambler, then most of his claim will fail.’ (paragraph 4).
All good operators have in place extensive customer protection measures, from policies and procedures to staff training and customer supervision, to ensure they are able to protect their customers and uphold the third licensing objective. Social Responsibility policies covering self-exclusion and customer interaction are not dusty documents sitting on shelves anymore. They are, or at least should be, proactive and robust documents which are designed to protect those who are at risk of gambling harms.
This case is a good demonstration of how important it is to ensure that an operator’s procedures are truly effective.
There were therefore two key factors at play here. Firstly, that Betfair was deemed to be a responsible operator. They were found to have credible witnesses, who took their roles seriously and were experienced individuals, and to have ‘live’ documentation, with policies and procedures which evolved with the landscape of the industry and an increasingly involved regulator. Further, their procedures were clearly being actioned and were not simply a tick box exercise.
As an interesting aside, the Operations Director at BETDAQ (a competitor of Betfair) gave evidence, the thrust of which was that ‘Mr Gibson could have placed large bets with BETDAQ on the betting exchange in the same way he had placed bets with Betfair‘ (paragraph 76).
Problem Gambling and the Claimant
Secondly, if a customer deliberately conceals their problem gambling, it is extremely difficult for anyone (operator or medical expert) to determine whether they have, or the level of, a gambling problem.
This raised another interesting point that the shear level of losses was not enough to conclude a gambling problem. In fact, Mr Gibson was the subject of several detailed and intrusive AML and RG checks from Betfair – each time answering questions and providing the documentation requested. On this point the Judge noted ‘Although [the losses] were very large, they appeared to be sustainable.’ (paragraph 15)
He attended football matches as a VIP guest and behaved convivially with all, showing no signs of distress… all of his financial information was sent for forensic checks with the AML team, questions were asked of the Claimant and he made several assurances to Betfair that he was gambling within his means, and was happy with his level of gambling. To further Betfair’s defence, even when faced with threats of lawyers and refusals to co-operate towards the end of the business relationship, they did not back down on any requests and ultimately made the decision to terminate the relationship.
Similar to a reasonable versus best endeavours debate, the Judge commented that ‘Betfair was under no regulatory (or other) obligation to implement the very best or most efficient system to identify problem gamblers. Its obligation was to have appropriate policies in place. In my judgment it did that.’ (paragraph 130)
Consequently, it was found that whilst the Claimant did have a gambling problem, the Defendant was not aware and did not ought to know.
Legal Position
This case has explored a number of complex legal arguments surrounding contractual relationships and the nature of any duty arising in a gambling agreement. There were three legal arguments tested:
- A breach of an implied contractual term under common law
- A breach of an implied contractual term under statute
- A claim of negligence and an alleged common law duty
All of these failed. However, the judge went on to make a number of comments regarding the usual tests in law which would have followed any of these being successful, as well as causation, which are worth a read.
The final legal argument to be tested was that of illegality under section 33 of the Gambling Act 2005 (General Offences; Provision of Facilities for Gambling). Again, this argument failed, with the Judge setting out that section 33 merely had the intention of imposing a penalty on one party. There is no mechanism within this section to render the contract void should the operator breach its licence terms (a big relief for operators…).
The only legal argument which came close to succeeding was the potential duty under common law by way of assumed responsibility. On this point, the Judge commented that ‘If Mr Gibson had asked to be excluded from Betfair or had asked that some formal restriction be placed on his gambling, I think it very likely that Betfair would have become responsible to honour those requests.’ (paragraph 164).
Conclusions
The Judge ultimately concluded that Betfair did not breach their licence terms, that they did not know or ought to have known that the Claimant was a problem gambler, and that even if they had there was no duty arising out of the relationship in any event.
Whilst there are some chaotic elements to this case… with allegations of destroyed Whatsapp evidence, jokes apparently being made at the Claimant’s expense and the fact he had made his problem with gambling known to ‘an unnamed tall man at Betfair’s hospitality box at Old Trafford and the landlord of his local pub in Leeds’ (paragraph 131) It has some very serious underlying themes, and is a very important case for operators.
The full Judgment can be found here-
For more information, or for any other gambling queries, please contact Amanda Usher (amanda@woodswhur.co.uk) or your usual Woods Whur contact.
Edited 03 December 2024.