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Read Full BioContrasting judgments over the past week have highlighted a disparity in how gambling losses are treated in the UK. The UK Gambling Commission fined Betfair £2 million ($2.67 million) on Wednesday for failing to prevent losses of thousands of pounds.
Meanwhile, a judge ruled that another Betfair user was solely responsible for his £1.5 million ($2 million) losses on the platform. In another case, a gambler was jailed for 17 years after stealing money to fund his losses, which totaled millions of pounds.
When handing down the £2 million fine to Betfair, a betting platform owned by gambling group Flutter, the UK Gambling Commission cited several examples of the operator’s failures.
In one case, a customer staked £86,000 on Betfair between November and December 2023, losing £6,000 during that 16-day period. In other cases, players deposited £12,000 over a 12-day period, £25,000 in 25 days, and another user reportedly lost £12,300 over a five-week period.
The Commission stated that Betfair failed to interact with users and review the account holders’ gambling activity. In another damning example, the Commission said a user placed over 300 bets amounting to £20,000 during a 7-hour gambling session. However, a manual review was only conducted after the user hit a loss trigger.
The Commission cited its rules, which Betfair failed to comply with: “A licensee’s systems and processes for customer interaction must flag indicators of risk of harm in a timely manner for manual intervention.”
Why are Other Users Allowed to Lose Millions?
While the main failings in the above cases were Betfair’s lack of timely reviews into signs of problem gambling, the operator was not held responsible in a case where a user lost £1.5 million ($2 million) on the platform.
Lee Gibson attempted to recover the massive losses he suffered at Betfair, but a judge ruled that he would have gambled elsewhere even if Betfair had blocked his account.
In the original ruling against Gibson, Judge Nigel Bird stated, “Mr Gibson was determined to gamble. If Betfair had stopped him gambling in 2015 or at any time, I am quite satisfied that he would have gambled elsewhere and to the same extent.”
Last week, Gibson lost his appeal, with judges upholding Judge Bird’s ruling. A judge similarly stated, “I can see no justification for allowing the appeal against the conclusion that Betfair neither knew nor ought to have known that Mr Gibson was a problem gambler.”
Gibson claims his problem was clear. He placed more than 30,000 wagers through Betfair between 2009 and 2019, racking up huge losses. Betfair eventually closed his account in 2019.
As a property tycoon, judges ruled that Gibson could afford to sustain the huge losses. The judge also said Gibson attempted to cover up his problem gambling, which meant it was unfair to expect Betfair to be responsible for his losses.
In Gibson’s case, the difference compared to the cases cited by the Commission is that Betfair appears to have verified the source of his funds and interacted with the player while he was losing money. Gibson was assigned a VIP host, who regularly had contact with him. While Gibson claims this encouraged his gambling, rather than put it in check, judges ruled against him.
Gambler Jailed After Stealing to Fund Habit
In another case this week, Nigel Baker was jailed for 17 years after funding his gambling habit by stealing from women he met on the dating app Plenty of Fish.
Baker reportedly lost as much as £4 million ($5.34 million) in one betting account between 2012 and 2020. The Times mentioned Betfair as one of the platforms on which he was gambling, although it is unclear whether it was there that he racked up the biggest losses.
It is also unknown how often the gambling company checked on Baker or verified the source of his funds. He lied to the women he elicited funds from, promising them a return on the money through his non-existent online bookmaker business.
In reality, he was gambling the money on betting platforms, such as Betfair, like any other user. While Baker was convicted on 18 counts of fraud, the money was coming from legitimate sources. The women knowingly gave him the funds, but under false pretenses.
Like Gibson’s case, he was covering up his problem gambling. Under current UK regulations, operators appear to be exempt from responsibility in these cases. It raises questions over how far their responsibility should stretch.
In a similar case in the US, Amit Patel, a member of the Jacksonville Jaguars’ finance department, stole $21 million from the team, which he gambled on FanDuel and DraftKings. FanDuel initially denied responsibility. A source close to the betting platform, also owned by Flutter, stated, “The way they see it … we got this money fair and clear. It’s not our problem that we have to forfeit it back to you.”
Eventually, FanDuel agreed to pay back a portion of the money, $5 million. Like Gibson, Patel failed in a lawsuit against Flutter, which claimed the operator assigned him a VIP host who encouraged his gambling problem. Judges rejected the allegation that FanDuel was responsible for the losses and theft.
UKGC Stresses Social Responsibility
While FanDuel voluntarily agreed to repay some of the money to the Jaguars, in most cases, operators will be able to retain money gained from bets placed legitimately, even if the source of the funds comes from dishonest means, such as lying, cheating, or stealing.
In the UK, the Commission tends to take a tougher line than regulators in the US, although the examples of Baker and Gibson highlight that this is not always the case.
When fining Betfair this week, John Pierce, Director of Enforcement at the Commission, said, “This £2 million settlement reflects the seriousness of the failings identified and the importance of meeting social responsibility and customer interaction standards.”
This year, the Commission has fined operators almost £25 million ($33.3 million), with Unibet paying the largest penalty of £10 million for its failures in social responsibility and anti-money laundering.
The Commission has also seen its costs double this year, as it fights a lawsuit over its awarding of the UK National Lottery license to Allwyn. The fine paid by Betfair this week may go some way to compensate for the additional legal fees it has to pay.
In its ruling against the company, it did not reveal whether the money would be distributed to the gamblers who lost on the platform. As the cases of Gibson, Patel, and Baker have shown, losers are rarely refunded.
