Sports Betting and Integrity Issues in the U.K.
By Nick Nocton

The Gambling Act 2005 came into force in Great Britain on Sept. 1, 2007, and introduced various provisions that address the potential for corruption in sports betting.

Section 42 establishes a new offense of cheating punishable by up to two years imprisonment on indictment. A person commits an offense if he cheats at gambling or does anything for the purposes of enabling or assisting another person to cheat. The section provides that cheating may, in particular, involve actual or attempted deception or interference with a real or virtual race or other event to which the gambling relates.

Section 336 provides the Gambling Commission with the power to void bets accepted by or through the holders of betting operating licenses. To do so, the commission must be satisfied that the bet was “substantially unfair” and should consider in particular whether:

1. either party supplied insufficient, false or misleading information in respect of the bet;
2. either party believed or ought to have believed that the relevant race or other event would be conducted in contravention of industry rules;
3. either party believed or ought to have believed that the offense of cheating (see above) had been or was likely to be committed in respect of anything to which the bet related; and
4. either party had been convicted of cheating in respect of anything to which the bet related.

Further, Section 88 provides that a condition attached to an operating license may require the provision of information of a specified kind to the commission or to others, and Section 30 provides that the commission may pass information received in the exercise of its functions to any of certain sports governing bodies that are listed in a schedule to the act.

Sports governing bodies have for some time now been pressing the betting industry in the U.K. to cooperate more with them by providing information on suspicious betting patterns and underlying data that might lead to the prosecution of those suspected of profiting from the corruption of sports that are the subject of betting markets.

Over the last few years, leading betting exchange Betfair (which enjoys a massive share of U.K. horserace betting) has entered into a number of voluntary memoranda of understanding with various leading sports bodies, including the Jockey Club (now the British Horseracing Authority), the Football Association and others, under which Betfair agrees to provide details of unusual betting patterns with to the intent of exposing corruption.

It must be said that the vast majority of betting operators in the U.K. have not followed suit, with most taking the view that it is not their role to police the integrity of sports and/or that the privacy of their customers’ personal data is paramount. Many traditional operators also suggest that it is the betting exchanges, which allow people to lay bets (i.e. bet on a horse, team or player to lose), that are in particular the most likely platforms for corrupt betting. This attitude conveniently ignores the long history of betting scandals going back many decades and the fact that, especially in sports involving either two or few protagonists, backing one team with a bookmaker is effectively the same as laying out the other.

Nevertheless, the question of whether more betting operators should voluntarily provide information to governing bodies was effectively brought to a close this summer (for U.K. operators, at least) when, after a public consultation process in which representatives of many sports’ governing bodies were particularly vocal, the Gambling Commission amended the License Conditions and Codes of Practice applying to holders of U.K. operating licenses.

Now the general license conditions include, at General Condition 15, a requirement that betting operators share with the sports bodies set out in the schedule to the act information that might lead the commission to void a bet or relate to a breach of a rule applied by that sport’s governing body.

Various data protection and privacy issues arise, and it will clearly be sensible for operators to consider an amendment to their terms and conditions or privacy policy that highlights this potential disclosure of customers’ personal data. The key, however, is that General Condition 15 opens an information gateway for the governing bodies and places an onus on U.K. licensed betting operators to disclose suspicious betting activities.

It does not apply, however, to non-U.K. operators, notwithstanding that many of these can advertise in the U.K. as if they were licensed here. Operators licensed in any EEA country or Gibraltar can advertise in the U.K. as of right, and the so-called “white list” has so far extended this entitlement to operators licensed in Alderney and the Isle of Man.

This entitlement led to a minor political storm recently, after a leading (and highly reputable) Gibraltar-based betting operator refused to provide information to the British Football Association after allegations by one of its former employees that it had accepted bets from a number of leading football managers (who are prohibited under the sport’s various rules from betting on competitions in which they are involved). The company’s refusal to breach customer confidentiality (and, arguably, data protection laws), in particular on the basis of allegations that it says are unsubstantiated, led to ill-advised suggestions that Gibraltar should be removed from the white list.

In fact, Gibraltar is not on the white list because it does not need to be. Gibraltar is enshrined in the Gambling Act 2005 as having equivalent rights to a full EEA state for the purposes of the relevant provisions on the advertising of “foreign” gambling (Section 331). This section provides that operators from EEA countries are entitled to promote their products in the U.K. (a no-questions-asked application of the European law principles of free movement of goods and services between Member States). Gibraltar-based operators are therefore entitled to advertise in the U.K., and only the repeal of part of the primary legislation could change that (no doubt risking political and legal repercussion in Europe).

It can be seen, however, that even if it cannot force the hands of licensees from other jurisdictions, in promulgating the relevant sections of the act and the various regulations deriving from them, the U.K. has taken serious steps to deal with the issue of corruption in sports betting.

It is ironic that this should all come to a head at the same time as the collapse of the highest-profile criminal prosecution yet to be based partly on information provided by Betfair, in this case to the Jockey Club (into alleged race fixing). In that case, the judge threw out the prosecution’s case, ruling that the defendants (including the U.K.’s leading flat jockey, Kieran Fallon) had not case to answer. This was clearly a setback for sports and the horseracing authorities in particular, but by no means does it entirely undermine the government’s commitment to establishing information gateways between the betting industry and the sports.

The considerable cost involved in compliance is not something that the betting operators will welcome, but it seems that information sharing is here to stay.

Nick Nocton is a Partner in the Gaming and Betting, Company Commercial Department at Jeffrey Green Russell Solicitors.