The last month has witnessed the cessation of trading in the UK of two licensed betting operators, BetBright and 188BET, prompting questions that go to the heart of both (a) the contract between bookmaker and customer and (b) the role of the Gambling Commission, as regulator, when a bookmaker decides to void unsettled bets, resulting in a mass of complaints by dissatisfied customers.
Circumstances behind the closures
First of all, it is important to note that different circumstances applied in relation to each of BetBright and 188BET.
BetBright’s decision to cease offering gambling services arose from the acquisition of its sports betting platform by 888.com for just £15million suggesting, in the view of Regulus Partners, a “complete business failure rather than strategic realignment”. In the FAQ section of its closure notice on 5 March, BetBright stated in relation to unsettled bets: “As we cannot guarantee that we will have assets or personnel sufficient to settle bets whose outcomes are to be determined after [5 March], we have decided that it is in the best interests of customers to void these bets and refund stakes such that they are immediately available to be withdrawn”.
By way of contrast, in its closure announcement on 26 March, 188BET described the decision to close its UK business as “a commercial decision in a very competitive marketplace”, explaining that it “was solvent and fully able to meet all its financial obligations which includes its customer funds that remain ring-fenced and safe”. As previously reported by SBC News, 188BET explained that, amongst other things, ante-post or pending bets would be honoured for all events occurring up to 23.59 on 30 June 2019, with single bets placed for events after then being voided and the stakes returned within 48 hours.
In both cases, the closures resulted in regulatory inquiry by the Gambling Commission.
A Commission spokesperson has said: “We have carefully looked at the situation with BetBright. During our enquiries the operator highlighted the very real possibility of going into insolvent liquidation if it remained open. This would have resulted in customers receiving no winnings and no refunds on stakes which had been placed. This was a significant risk for BetBright’s customers and therefore we are content that the return of stakes, as part of an orderly closure of the business, is the best option available for the vast majority of customers in what is an unusual and difficult situation.”
As matters transpired:
- on 6 March, 888.com confirmed that, as a goodwill gesture, all Cheltenham Festival ante-post horse racing bets placed by former BetBright customers would be kept alive and honoured by 888sport on their original terms and
- on 29 March, it was announced that Rich Ricci, former BetBright Executive Chairman (acting in his personal capacity), had partnered with BetVictor to announce a plan enabling former BetBright customers (choosing to do so by 4 April) to have their other ante-post bets reinstated and honoured via the BetVictor platform.
In the case of 188BET, the Racing Post has reported that the Commission has stated: “We are making inquiries with 188BET into this matter, but we do not talk about ongoing cases. We advise all customers who are affected to carefully read the operator’s website.”
A further statement by the Commission is awaited regarding the outcome of those inquiries but, given the contrasting background circumstances, it would be surprising if a more critical finding is reached than occurred in the case of BetBright.
Nevertheless, grave concerns have arisen that a precedent has been set that may leave consumers without recourse in the event that similar closures (and consequential voiding of bets) occur in the future, without another operator stepping in to save the day, as eventually occurred in the case of BetBright.
What is the position regarding the voiding of bets?
Is it the case, as The Guardian has asserted, that it “is a principle that underpins the integrity of the entire gambling market and industry” that “a bet struck in good faith cannot be unilaterally declared void by one of the two parties to the wager”?
In my view, for the reasons set out below, it is not as straightforward as that.
- In circumstances where a bet is “substantially unfair”, the Gambling Commission itself has power to void a bet, pursuant to section 336 of the Gambling Act 2005. Examples of this include where one or both of the parties to the bet:
- supplied information in connection with it that was insufficient, false or misleading, or
- believed, or ought to have believed, that the race or event about which the bet was made was, or would be, conducted in contravention of industry rules that apply to the event, or
- believed, or ought to have believed, that the offence of cheating had been, or was likely to be, committed in relation to the bet, or
- have been convicted of the offence of cheating, as set out in section 42 of the Gambling Act 2005.
- In addition, the Gambling Commission requires all bookmakers to have rules covering the circumstances under which they will void a bet and how they will treat late bets.
- On its website, the Commission states in relation to late bets that “bookmakers’ terms and conditions will ordinarily state that. in circumstances where a bet is inadvertently accepted after the ‘off’ time (also known as the ‘no more bets’ time), the stake will be returned as the bet will be void”, adding for the benefit of consumers, “in the event of a complaint or dispute, you should contact the relevant bookmaker who should investigate in line with their internal procedure and inform you of the outcome.”
In accordance with the Commission’s requirement that bookmakers have rules covering other circumstances under which they will void a debt, it is relevant to note that BetBright’s terms and conditions contained a list of specific circumstances in which it reserved the right to void bets, including where:
- there are suspicions or knowledge of the misuse of inside information and/or manipulation of an event that jeopardizes the integrity of the event,
- there is a technological failure affecting the integrity of a transaction or the customer’s account,
- suspicions or knowledge exist of illegal or fraudulent activity by the customer while using its services,
- suspicions or knowledge exist of the customer’s breach of any of the terms and conditions or the rules governing a particular bet or transaction,
- suspicions or knowledge exist of the customer acting in a manner detrimental to the conduct of its business, for example:
- taking unfair advantage over it or any other player, or
- otherwise acting in an unfair manner by exploiting a fault, loophole or error in its software, or
- cheating, or
- colluding with others
- suspicions or knowledge exist of:
- difficulties on the part of the customer in obtaining credit,
- the customer having become bankrupt or undergone similar procedures anywhere in the world,
- in its judgment, a manifest error has occurred in the terms of a bet or transaction placed by the customer,
- it becomes aware that the customer has “charged back” or denied any of the purchases or deposits that he or she made to their account
- it is required to do so by law, or
- a customer’s account has been closed (seemingly whether closed by it or by the customer) and:
- the customer has placed any bets in relation to events which have not yet taken place at the time of the termination of the customer’s account, in which circumstances the stake would be returned to the customer, or
- the customer has a bet with multiple legs and there are legs that have yet to settle, in which circumstances the bet will be settled as it stands by voiding the unsettled selections and re-calculating the odds accordingly.
Despite earlier rumours of legal action, the BetBright controversy seems to have been resolved without either (a) the fairness of its contractual terms (including, in particular, the final one set out at (10) above) being tested by the courts under the Consumer Rights Act 2015 or (b) the Gambling Commission invoking LCCP social responsibility code provision 4.1.1 by requiring evidence from BetBright about how it had satisfied itself of the fairness of that particular contractual provision.
I suspect the Commission would have had greater concerns had the apparent “very real possibility” of BetBright’s insolvent liquidation ever been realised, with the consequence that customers would have received no winnings and no refund in relation to stakes-placed.
This serves to underline the need for all B2C operators licensed by the Commission to ensure they comply with the changes to the protection of customer funds rating system that come into effect on 29 April.
On the subject of change, just in case you need a reminder:
- new gambling advertising standards to protect under 18 year olds came into force on 1 April,
- the new National Strategy to Reduce Gambling Harms will be launched by the Gambling Commission on 25 April, and
- LCCP changes to age and identity verification requirements for remote gambling operators will come into force on 7 May.
Two final reminders
Finally, two further reminders:
- the deadline to respond to the Gambling Commission’s consultation on customer interaction and ADR (and its accompanying call for evidence on gambling website blocking software) is 9 May, and
- the deadline to respond to the Commission’s call for evidence on (a) gambling with credit cards and (b) category B gaming machines and player protection is 16 May.
David Clifton – Director – Clifton Davies Consultancy Limited