As reported in the press this week, an aide of Rishi Sunak (one Craig Williams, who has dreams of being re-elected as the Tory MP for Montgomeryshire and Glyndwr (anyone running a book on the chances of those dreams now being realised?)) is being investigated by the GB Gambling Commission (the “Commission”) in respect of a £100 bet on an election being held in July. Mr Williams placed this bet online with Ladbrokes, some three days before such announcement was made by the Prime Minister. Ladbrokes’ systems detected Mr Williams as someone who might be a ‘politically exposed person’ and referred the matter to the Commission.

What offence may have been committed?

The use of “inside information” to gain an unfair advantage when betting may, the Commission is reported to have said, constitute an offence of cheating under Section 42 of the Gambling Act 2005 (the “Act”). A person commits an offence under s.42 of the Act if s/he ‘cheats’ at gambling. For the purposes of the section, it is immaterial if the person who cheats actually wins anything.

The Act doesn’t define ‘cheating’ per se, but at s.42(3) states that ‘cheating’ may consist of ‘actual or attempted deception or interference with the process by which gambling is conducted…’.

Anyone found guilty of section 42 commits a criminal offence; the maximum sentence for which is imprisonment of up to two years, a fine – or both.

While ‘cheating’ is not expressly defined, it is our view that the commission of an act that produces an unfair advantage could fall within the scope of the Act. It must be the case that the use of inside information, which gives the punter an unfair advantage, is a form of cheating, and should be dealt with accordingly. Further, the Supreme Court (in the Phil Ivey/Genting Casinos case of 2017) confirmed that neither dishonesty nor an intention to deceive is a necessary element of ‘cheating’ for the purpose of the Act; there is therefore no need to prove malintent, simply the possession (and consequence use) of inside information prior to the placing of the bet.

Accordingly, irrespective of whether Mr Williams acted dishonestly or not, if he was privy to inside information regarding the date of the election prior to placing his bet, he has potentially committed a criminal offence. Unlike some of the cases involving, for example, match-fixing by sports players, while possession of information about the date of the election wouldn’t change the outcome of the event (i.e. whether Mr Williams placed his bet or not, presumably Rishi Sunak would still have called the general election for 4^th July), it would still provide the holder of the information with information the bookie doesn’t – and couldn’t – know, and therefore give the bettor an unfair advantage.

What does the Commission consider ‘inside information’

The Commission published a policy position paper in August 2018 on ‘inside information’ (link here) and proposes the following definition (our emphasis added):

Inside information is information which is known by an individual or individuals as a result of their role in connection with an event and which is not in the public domain and is related to: […] (d) activity related to a non-sporting event on which bets can be placed.

While the prevailing message from the policy is that sanctions for misuse of inside information should be a matter between the respective employer or sports body and their employee or player, the paper also states there are some ‘limited’ circumstances where criminal enforcement action may be undertaken, for example, in ‘high-impact’ cases or ‘where there is a need to establish legal precedent’.

While clearly, if Mr Williams was privy to Mr Sunak’s intention to hold a July election prior to placing his bet, this meets the Commission’s definition of ‘inside information’, whether there is a need ‘to establish legal precedent’ by bringing criminal enforcement action against him, remains to be seen.

What are operators’ obligations?

Licensed operators have a duty, pursuant to operating condition 15.1 of the LCCP, to report their knowledge or suspicion of the commission of any offences under the Act (along with any offences resulting from a breach of any licence condition or code provision) to the Commission.

While politicians can – and do – place bets against political opponents or on the success of those within their own party, it’s unusual for them to be caught up in allegations of bet fixing or ‘cheating’ – which tends to be the purview of those in the sporting world. For example, Lucas Paqueta (West Ham) was recently charged by the Football Association of ‘spot-fixing’, for allegedly deliberately earning yellow cards in four games over the previous two seasons. There are also stringent checks by most online operators to identify those persons likely to be ‘politically exposed’ and therefore subject to greater scrutiny.

As Ladbrokes did so well in Mr Williams’ instance, operators should continue to monitor suspicious play patterns to address the potential misuse of inside information and report any such suspicions to the Commission. Operators should also ensure their terms of business are drafted with sufficient clarity and legal force to allow them to void any bets where cheating is suspected.

What happens next?

We may find this is the tip of an iceberg. The Guardian, yesterday, reported that the Commission had written “to all licensed bookmakers requesting information on anyone who stood to gain more than £199 by betting on a July election in the UK” and had “asked bookmakers to confine the search to all customers making such bets in the first three weeks of May”.

Whether Mr Williams’ bet was serendipitous or suspicious, it certainly wasn’t the wisest decision. Irrespective of any dishonesty, it’s hardly a good look for an active member of the Conservative campaign machine to have a flutter on the election date – even for the prospect of winning the princely sum of £500.

However, does the need to hold politicians to account when their integrity is questioned mean that Mr Williams’ case (if he is found to have been in possession of inside information) constitute a ‘sufficient need to establish legal precedent’? And if it does, will the Commission (or police) decide to seek a prosecution? One hundred quid says it might be in the public interest to do so…