THE CASINO VIEW - PAUL SCULPHER
These days, there’s a lot of talk about bettors having their accounts limited as to how much they can stake because, in theory, they’re winning too much. The truth is a little more complex, and different people would tell you different things from different sides. Some will say it’s an outrage, an infringement of rights – others will say it’s a necessary evil to keep sportsbooks running. There’s a subset who’ll even talk about the laughably never-existent days of honest Queensbury rules of combat between gentleman bookmakers and gentleman punters to see who came out on top.
Firstly, what’s actually happening in the UK? Well, for one, it’s clear that it’s not just winning that gets accounts limited, but also what you actually bet on. The best example I’ve heard was a proposed stake, on a brand-new account with – well, an alliteratively named major operator – of £20 ($24.88) on a 150/1 shot. The odds were trimmed to 66/1 pre-accepting the bet, with a max stake of £4, and that was the last bet the punter was able to get on that account. Oh, and the bet lost.
That’s an extreme example, but you don’t have to show too much knowledge to get chopped. Even I, with betting prowess essentially limited to player props on the New England Patriots NFL team, plus tips from friends, have lost the ability to use my accounts with a number of the main operators.
There’s even a solid market for losers’ accounts to be used second hand, with years of losses likely to mask a change of “owner” and give some runway for profitable betting. However, there are also legal issues at play here. A notable case in Northern Ireland, for example, was one where a student placed £25,000 of bets and bet365 refused to pay out. The operator suspected (or, if you prefer, it was blatantly obvious) that someone else staked the bet, perhaps to get around staking limits on their own account. They refused to pay and the court case from the punter was discontinued. The bookies won. But what’s fair, and what’s ethical?
Many of the challenges in this debate stem from the explosion of side markets for sports betting. In a world where online bookies offer 200+ bets per NFL game, it’s an old adage that the bookie has to get them all correctly priced, while the sharp punter only needs to spot one wrong price and stake accordingly. That’s certainly true. However, with that in mind, if stakes were unlimited, that would be the end of a lot of operators. Or, at least, a massive contraction in either odds or markets offered. Neither of those outcomes is good for the industry.
Personally, I view the betting market as the same as a market for any other goods or services. What are you buying? Well, essentially, you’re buying the right to win £1 on a sporting event, and the odds just determine the price of that £1 of winnings. A company like Tesco wouldn’t be duty bound to accept an offer for a banana that cost less than they could source that banana for. Therefore, I don’t think it’s outrageous that bookies should be able to choose their customers. At least, as Alun Bowden of EKG Gaming points out, brands are getting, and will continue to get, more precise on their limiting as tech improves.
THE LEGAL VIEW - MELANIE ELLIS
This issue has been brought into focus in Great Britain by the Gambling Commission’s CEO, Andrew Rhodes. In a recent briefing to gambling industry CEOs, he stated that the regulator would shortly be “asking for data on account restrictions and the reasons.” The rationale for this request was a desire to understand “what the actual reality is for accounts being factored, restricted, closed, or put onto zero stakes.”
Even I, with betting prowess essentially limited to player props on the New England Patriots NFL team, plus tips from friends, have lost the ability to use my accounts with a number of the main operators - Paul Sculpher
To avoid panic and assumptions that this data-gathering exercise will form the backdrop to the regulator assessing options for restricting bookmakers’ ability to limit sports bettors, Rhodes was careful to point out that this was not the intention. He indicated that such requirements would need to be introduced through legislation, outside of the Gambling Commission’s powers to impose licence conditions. It should be noted, though, that the Commission has a statutory role to advise the Government on gambling regulation and could recommend areas for legislative intervention. At the moment, the regulator’s concern appears to centre on transparency and ensuring that customers understand what has happened and why. Still, by now we all know to be wary of roads paved with good intentions.
The concept of a ‘right to bet’ or ‘minimum bet law’ is not new. Notably, rules have been introduced in many Australian states. However, rather than being mandated by national legislation, these limits form part of the licence granted to bookmakers by racing authorities. Licence conditions prevent the operator from refusing a bet or taking other action, such as closing the customer’s account, as long as the potential winnings are under a specified amount for that type of race. So far, these limits have only been applied to certain horse and greyhound races, rather than more widely to sports betting.
The Massachusetts Gaming Commission has also opened discussions with operators on this topic. Although the majority declined in attend an initial meeting, a seemingly more productive discussion took place in September. As appears to be the case with the British Gambling Commission, consumer protection was also central to the Massachusetts regulator’s interest. For this regulator, as with the Gambling Commission, collecting operator data on bet limits is the next step.
As Paul points out, the idea of forcing a company to accept someone’s business seems to counter well-established principles of contract law in the UK. By advertising goods at a certain price, a shop is not bound to sell them to anyone who agrees to buy at that price – the shop is merely making an ‘invitation to treat.’ The reasons behind this concept are sound: in the seminal case dating from 1953, Boots displayed certain products on its shelves that contained regulated poisons, making it necessary for a pharmacist to approve the sale. A sale was not deemed completed until the customer’s offer to buy the goods had been accepted by the pharmacist, who had to be entitled to refuse the sale if the customer did not pass scrutiny.
Likewise, it would not be appropriate for a bookmaker to be deemed to be making a legally binding offer, simply by publishing odds for sporting events. Otherwise, any person walking into a betting shop could accept the offer and form a binding contract, before appropriate age, identity, safer gambling and money laundering checks had been carried out. However, this does not rule out the possibility of mandating acceptance of certain bets in circumstances where the customer has passed this scrutiny, as is the case in the various Australian states.
In addition to concerns relating to consumer protection and transparency, another relevant factor for gambling regulators to consider is that many bettors who have been limited by licensed operators will turn to the black market. Not only does this reduce tax revenues for the Government, it places those customers at risk of losing their deposits or not having winnings paid out. In upcoming conversations with the Gambling Commission, it will be important for operators to demonstrate that customer accounts being limited is the exception rather than the rule, that limits are not being applied arbitrarily, and that they are being transparent with customers about the reasons for these measures.
