In a significant judgment for the gaming industry, the High Court of England and Wales held in Gibson v. TSE Malta LP (t/a Betfair)[1] that gambling operators do not owe a general duty of care to their customers to prevent gambling-related harm, and that licence conditions imposed on operators do not create implied terms in the contract between the consumer and the operator.
Background
The claimant, Lee Gibson, lost approximately £1.5 million gambling on Betfair’s betting exchange between 2009 and 2019. During much of this time, Gibson’s account was managed by Betfair’s VIP consumer relationships team. From November 2014, Betfair was operating under a licence issued by the Gambling Commission that imposed various obligations on the operator to prevent harm to its customers.
Gibson brought proceedings to recover the greater part of his losses from Betfair. He claimed that he was a ‘problem gambler’, and that Betfair either knew or ought to have known this but did nothing to prevent his losses, which was a breach of its operating licence. This, Gibson argued, was a breach of the duty of care Betfair owed him to prevent his gambling losses. Further, he maintained, it was a breach of the contract between himself and Betfair, which contained an implied term that Betfair would operate in accordance with the terms of its licence.
The High Court decision
The key issues before the court were:
- Did the relationship between Gibson and Betfair give rise to a novel duty for Betfair to take care to avoid or prevent gambling losses?
- Was a term implied, from necessity and/or statute, that Betfair would operate in accordance with the terms of its licence issued under the Gambling Act 2005?
Duty of care
The court considered Gibson’s claim to be ‘doubly exceptional’ as it required not only a duty of care to be established, but also, one that required Betfair to prevent Gibson from suffering pure economic loss caused by his own actions. In its analysis of Gibson’s claim in this regard, the court first considered whether there had been an assumption of responsibility by Betfair towards Gibson, and then went on to consider the three-stage test for establishing a duty of care set out in Caparo Industries Plc v. Dickman.[2]
The court held that because it did not know – nor ought it to have known – that Gibson was a problem gambler, Betfair had not assumed any responsibility towards him. In reaching his conclusion that it could not be said that Betfair ought to have known about Gibson’s condition, the judge quoted from the judgment in Calvert v. William Hill [2008] EWCA Civ 1427 with approval, that it was ‘wholly unrealistic to suppose that in the ordinary course of its business a bookmaker can be expected to be able to identify that sub-class by way of what amounts to a process of medical diagnosis.’ The fact that Gibson had a VIP manager and received certain incentives to participate from Betfair was held to be standard industry practice and did not demonstrate any assumed responsibility by Betfair.
The court then turned to the Caparo Industries three-stage test for establishing a duty of care and considered whether the harm was foreseeable, whether there was sufficient proximity between the parties, and whether it would be fair, just and reasonable to impose a duty of care on Betfair in the circumstances. While the court accepted that the alleged harm to Gibson was foreseeable, it held that the relationship between the parties was not so proximate that it would be appropriate to impose a duty of care, nor was it fair or reasonable to impose such a duty.
The court noted that the position may have been different if Gibson had self-excluded from further participation, in which case the court considered it likely that Betfair would have become responsible to honour those requests. That, however, was not the position in this case.
Implied term
As to Gibson’s claim that there was a term implied by common law in the contract between himself and Betfair that Betfair would comply with the terms of its licence, Gibson was required to show that either the term’s existence was so obvious that it goes without saying and/or that the term was required for business efficacy.[3]
The court quickly dismissed Gibson’s argument in this regard, concluding that the term contended for was ‘plainly’ not one that was so obvious that it goes without saying. Indeed, the UK government’s 2023 white paper, ‘High stakes: gambling for the digital age’, had set out the opposite view – namely, ‘licensees’ obligations around preventing harm [set out in licences] are not generally part of terms and conditions and so do not form part of the contract between the customer and licensee.’ As to business efficacy, the court stated that Betfair’s consumer contract worked ‘perfectly well without the need for the implied term’, because it works within the careful framework of the Gambling Act.
The court then turned to Gibson’s argument that the term contended for was implied by statute – namely, the Supply of Goods and Services Act 1982 and the Consumer Rights Act 2015, which imply a term that Betfair must perform or carry its ‘services’ with reasonable skill and care. Again, the court quickly dismissed this argument: These statutes create an obligation for existing duties to be performed to a certain standard; they do not create new duties in the contract. The duty in this case was simply to facilitate the placing of bets. There was no duty on Betfair to interact with its customers as contended for by Gibson.
Takeaway
The High Court’s decision is a welcome clarification of the scope of operators’ obligations to their consumers. It is, of course, vital that operators provide their services responsibly, provide customers with the opportunity to self-exclude and deal appropriately with any who do. However, the court was clearly right to conclude that an operator cannot be held responsible for a gambler’s losses when that gambler has not disclosed that they have a problem.
[1] [2024] EWHC 2900 (Comm)
[2] [1990] UKHL 2.
[3] Marks & Spencer v. BNP Paribas SST (Jersey) Limited [2015] UKSC 72.
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