Gambling and The law

Sat, Jun 19, 2010

Betting News

What with one thing and another I find myself considering the role of the law in the world of betting and gambling. I think we might be at something of a crossroads. Historically bookmakers have made their own rules and run their own businesses and punters have largely liked or lumped it. I predict we are going to see increasing legal challenge to some practices and I also predicit that the law is about to get more involved in what the industry does. Might be wrong but here’s a few thoughts. Small video treat at the bottom for anyone making it that far!

News that Harry Findlay is to appeal his six month disqualification from racing comes as no surprise. It is taken for granted that he will appoint some form of legal advisor or representative for this process. In fact, it’s increasingly taken for granted that legal representation is required when dealing with serious charges under the rules of racing.

That the BHA urged Findlay to seek legal representation prior to his initial hearing is a credit to the authority and evidence of how, despite constant accusations of not moving with the times, it is in fact way ahead of the betting industry in at least some respects.

Betting and the law have made each others acquaintance only rarely over the years. If history has taught us anything it’s that courts have little experience of dealing with gambling related matters. For a very long time the role of the law was limited with gambling debts deemed not recoverable in law. All of that changed in 2007 with the arrival of the Gambling Commission and a whole new legal landscape. The industry may not yet have caught up though.

I’m still fascinated by the questions I’ve raised here on the blog regarding the interplay between Findlay, Betfair and the BHA that has brought us to this particular pass. It’s unlikely that the appeal process alone will shed too much more light on what has happened, although you never know. It’s likely though that we may have to wait a while for this story to play out further.

We’ll have to see how Harry Findlay fares in his appeal. Those who have read most of the press coverage will be hopeful of a reduction in his penalty. Those who have taken the trouble to actually read the rules, the penalty guidelines and the panel’s findings may be less inclined to expect any alteration to the original findings but time will tell.

Harry Findlay has also spoken of some form of legal action in relation to all of this and the chance of legal action must increase dramatically if his appeal fails. What interests me about that prospect is that if history tells us one things it’s that courts have very little experience of dealing with gambling related matters. What a court may make of such issues as are touched on in a case involving individuals betting on horses losing may be of great siginificance.

It’s not just the Findlay case though that might pose interesting questions for our learned friends to consider. There are a number of quietly ticking legal timebombs secreted all over the betting industry. There can be no other industry of comparable size and economic significance that has been so little explored by case law and precedent.

As we hurtle down the cyber highway of technological advancement we still have an industry that takes bets scribbled on slips of paper. An industry that has no clear consensus of when a contract is actually completed between punter and bookie. An industry that holds the crucifix of palpable error against the dark forces ranged against it despite the fact that at least one judge so far has denied a significant difference between 5/4 and 5/1. An industry that can take a bet after an event has started but which might decide to void that bet and only inform the punter when he comes to collect his ‘winnings’.

It’s an industry where deceit is sometimes lauded and subterfuge is standard. It’s an industry where the countless casualties of addiction and desperation that these businesses eviscerate and scatter like so much chaff are never mentioned, nor named, nor mourned.

One of the reasons that the stardust of Betfair’s audit trail has worked its magic so powerfully on the minds of many industry journalists is that it seems to offer such a contrast to the old ways. The shiny new city style technology seems to promise an alternative to the ledger of quill written rules and regulations and the Dickensian characters that populated the darker recesses of this colourful, louche, sometimes dangerous business.

How far have we really moved on though? What if the digital age is no different to the age of chalk boards and tic tac? The legal landscape has changed. Bets are now legally binding contracts. We have a Gambling Commission and our plc s prepare whole papers on corporate responsibility. To the law though we are still virgin territory. The law has still not mapped our deltas and our tributaries. It might be that they will find no foes here. It might of course be that once the process of exploration really begins (as it must) we will see something of a journey into the heart of darkness.

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8 Responses to “Gambling and The law”

  1. Tonk. Says:

    Sean,

    If a betting “contract” is deemed unenforceable, then it must follow that no contract can be formed between a bookmaker and a punter.

    If contract law was applied to bookmaking in the same way as other goods and services contract, then it would likely be as follows;

    When the bookmaker “offers” odds to would be punters, this would be deemed an invitation to treat and not actually an offer for the purpose of contract law.

    When the punter offers the bookmaker money to take the odds advertised, then, imho, this is when the contract would be formed…ie; it is the punter that has made the offer capable of being accepted and the bookmaker accpts it.

    For a contract to be valid, once the offer has been made and accepted, then there needs to be an intention to create legal relations between the parties; This would need a new law to facilitate this because of the information in my first paragraph.

    There also needs to be an exchange of consideration….This would be the punters money in exchange for the chance to win.

    At the moment it is a legal minefield due to our legal system however, in my view, getting lawyers involved in anything, never benefits anyone other than lawyers. Having said all that, in the twenty first century, it would be wise to legally codify the relationship between punters and bookmakers. Perhaps it could be written in such a way that it is not so one sided.

  2. seanboyce Says:

    Hi Tonk and welcome aboard.
    It is no longer the case that betting contracts are deemed unenforceable. That was the case but it changed in 2007.
    As yet though it’s not really be tested by any significant cases.
    My question is what will happen when the first cases are heard. It may be that you’re right that specific laws or variations to law might be needed. In theory betting will indeed be treated the same as any other consumer transaction. Whether that stands up or not is anyone’s guess and there could be serious implications for various parts of the betting industry I think.

  3. Santiburi Says:

    Sean, can you point me to the ‘new law’? I must have missed that change coming through and can’t begin to see how it might work. Be intrigued to understand more.

  4. seanboyce Says:

    It’s the Gambling Act 2005, which came in in autumn 2007, following on from formation of Gambling Commission in 2005 all of which was intended to bring fairness and openness to the industry, protect punters and increase social responsibility etc and to generally modernise the way the industry was overseen and regulated.

  5. Tonk. Says:

    Thanks Sean,

    I was not aware of the changes you mentioned. I studied law many decades ago and to be honest, I have not kept it up, as it became irrelevant to the area of work I went into.

    I suspect it would not take much to get it codified along the lines of other consumer transaction however, I have noticed that we have recently had a raft of badly drafted legislation that has led to many unforeseen consequences.

  6. seanboyce Says:

    Yes, well there’s a lot of people waiting for the Gambling Commission to do something that would justify its existence Tonk!

  7. Santiburi Says:

    OK, I’m no lawyer. I’ve read the relevant section of the Gambling Act 2005 and can’t see how a bet becomes a contract based on what’s in the Act. Therefore, as Tonk suggests, seems like someone needs to do drafting and then get reasonable law enacted somehow.
    My gut suggests that the law will differentiate between a shop/cash bet and an online account bet. It will differentiate again for an exchange bet. Going to be a real challenge for the legal world.
    Possibly naive question but what happens once a bet becomes a commercial contract as regards taxation? Isn’t life going to be a darn sight easier if we keep bets as ‘contracts between people’ and a debt of honour?

  8. seanboyce Says:

    No taxation impact as yet. Govt is terrified of opening the door to a situation where we can all offset our gambling losses against income hence the reluctance to tax any winnings. Even when the govt has looked at exchanges, and acknowledged that business is being carried out by some, it has fought shy of attempting to tax that business.
    In terms of contract law it could become interesting. Contract law as I understand it in this sphere applies to the relationship between a supplier and a consumer. If my bet is matched by a commercial market maker, or a professional punter I’m not actually dealing with a consumer at all it might be argued. Like I say, it’s all going to be virgin territory and there’s going to be some interesting rulings I’m sure.
    My prediction (and it’s instinct rather than legal expertise) is that bookmakers are going to be in trouble with late bets taken and with the palpable error rule and exchanges are going to find difficulty becuase some of their consumers are not consumers at all but businesses. That’s before we get into any of the complicated stuff!

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