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MediaWrites

By the Media, Entertainment & Sport group of Bird & Bird

| 6 minute read

High Court Decision Confirms Limits on Gambling Operator Responsibility – No Duty of Care

In a much-anticipated decision, the High Court has underscored the boundaries of responsibility that gambling companies owe towards their customers. This verdict not only reinforces the legal framework under which operators must conduct their businesses, but also highlights the challenges in identifying and managing those at risk of suffering gambling harm. Crucially, the judgment confirms that gambling operators do not owe a general duty of care to customers. This decision may provide operators with much-needed increased protection from spurious claims.

Background 

Mr Gibson had lost around £1,500,000 through his Betfair account over the course of almost a decade. Following the closure of his account by Betfair, he brought a number of claims seeking to recover his losses. Central to his claims were the arguments that Betfair had failed to take adequate steps to protect him from losing these sums of money, and that it should have done so as it should have known he was a problem gambler. He pursued these arguments through three separate claims which are summarised below.

In short, the Court found that Betfair took various steps in order to ascertain that Mr Gibson could afford his betting losses, they also notified him at various points that there were controls he could use to limit his gambling. The Court took the view that Mr Gibson portrayed the image that he could afford his losses and refused to use any controls. As a result Betfair could not be said to have known or have been in a position where they should have known he was a problem gambler. 

Mr Gibson’s Breach of Contract Claim

Mr Gibson claimed that every betting transaction he made through Betfair created a new contract. He also claimed that there was an implied term in every contract formed when he entered into a betting transaction with Betfair that Betfair must act in accordance with its licence, including the Licence Conditions and Code of Practice (“the Licence Conditions”), and in particular the social responsibility provisions relating to customer interaction (provisions that Mr Gibson argued would mean that Betfair should have intervened and stopped him gambling). If such a term were implied, then Mr Gibson argued that by failing to prevent him from continuing to place bets, the betting transactions between Mr Gibson and Betfair were void.

The Judge disagreed with this interpretation and asserted that there was a single contract which was created when Mr Gibson had created his Betfair account. He went on to reject Mr Gibson’s breach of contract claim, finding that there was no implied term in the single contract formed between Mr Gibson and Betfair at the point of account opening, on the following grounds: 

  1. No implied term under common law: Under common law, a term will be implied into a contract where it is a term that is “so obvious that it goes without saying”. The Judge did not believe that a term requiring Betfair to comply in full with its licence was an obvious one. To support this, the Judge pointed to the 2023 White Paper, which stated that a “licensees’ obligations around preventing harm [set out in the LCCP] are not generally part of terms and conditions and so do not form part of the contract between the customer and the licensee”. 
  2. No implied term under statute: Another argument that Mr Gibson tried to make was that Betfair had to perform “the service” of the contract with reasonable care and skill (a term implied by Section 13 Supply of Goods and Services Act 1982/section 49 Consumer Rights Act 2015). He claimed that the relevant “service” provided by Betfair was to interact with him on the basis that he was a problem gambler and therefore Betfair had breached the contract as they had failed to interact with him and convince him to stop betting. The Court found that “the service” in the Contract was just the facilitation of bets. As a result, there was no breach of contract here.

Mr Gibson’s Negligence Claim 

Mr Gibson claimed that Betfair owed him a duty to take reasonable care to prevent him from suffering financial harm during the provision of gambling facilities. 

In examining this claim, the Judge had to consider whether Betfair had assumed any responsibility to take reasonable care to prevent Mr Gibson from suffering economic loss by using its gambling services. Mr Gibson alleged that Betfair did assume that responsibility by virtue of his status as a ‘VIP’, meaning his account was actively managed by the VIP team and because it knew or ought to have known that he was a problem gambler. 

The Judge, referring to this claim as “doubly exceptional” because of the assertion that Betfair had a duty to prevent pure economic loss brought about by his own actions, again refuted this point believing that: (i) Betfair did not assume responsibility to take reasonable care to prevent Mr Gibson suffering economic loss; and (ii) Betfair was not in a position that it ought to know Mr Gibson was a problem gambler. 

This was on the following grounds: 

  • Mr Gibson at no point asked for any restrictions to be placed on his account. If he had, Betfair would have assumed responsibility to ensure those restrictions were carried out. 
  • Betfair had no constructive knowledge of Mr Gibson’s problems, and therefore no constructive knowledge of a need to support him. In this regard: 
    • Mr Gibson was frequently reminded of the gambling restrictions Betfair offered and refused to put any of them in place.
    • Mr Gibson portrayed himself as a wealthy man who could afford his losses. He sent financial proof to show that this was the case on multiple occasions during AML checks (which the judge stated were carried out correctly) and assured customer service staff over the phone that he was a wealthy man.
  • It was said that VIP customer programs do not have as their core purpose taking responsibility for a gambler's gambling habits, they were seen as programs whose purpose was to foster customer loyalty.

Causation 

The Judge went on to say that even if Betfair had been found to owe Mr Gibson a duty of care and should have known that Mr Gibson was a problem gambler, the claim would still fail. The reason for this is that the Judge wouldn’t be able to attribute these losses to the operator. Mr Gibson was said by the Judge to be “determined to gamble”, the Judge believed that he would have simply incurred those losses with another gambling operator if Betfair intervened and closed his account. A few key facts led the Judge to form his position here: 

  • As mentioned above, Mr Gibson made an active effort to look like he could afford his gambling habit, so other operators would likely allow him to bet on account of this. 
  • Mr Gibson refused to use tools to limit his gambling. 
  • The Judge damningly said the “best evidence is what he did when Betfair would no longer deal with him”. Over the course of the trial, the following facts became apparent: 
  • Mr Gibson lost large sums of money through gambling with other operators after his Betfair account was closed.
  • Mr Gibson opened another account with Betfair under another name following closure of his original account.
  • When restrictions were placed on his account, Mr Gibson made threats over the phone about switching to another competitor operator.

Mr Gibson’s Illegality Claim 

Mr Gibson argued that Section 33 of the Gambling Act (“Section 33”), implies a term in all betting contracts, that they are void other than when they are operated in full compliance with the Licence Conditions.

The Court ruled that there is no such implied term. Asserting that Section 33 merely places a penalty for its breach. The Court believed that Parliament could not have intended that Section 33 or the Licence Conditions’ purpose was to void consumer gambling contracts upon their breach. The Court believed that that this would send the gambling industry into “chaos”. Whilst refuting this claim the Judge said the following: 

A successful gambler should not be deprived of the fruits of his bet, but equally… a losing gambler should not be able to escape the consequences of his decisions.”

Key Takeaways 

This decision is a helpful clarification that gambling operators do not owe a general duty of care to customers. It also draws a clear distinction between the regulatory framework in existence between operators and the Gambling Commission on the one hand, and the contractual relationship between operators and customers on the other. A failure to comply with the Licence Conditions does not automatically give rise to a claim against the operator by the customer.

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united kingdom, gambling, media entertainment and sport, london, gambling law, insights