A judge has forced a betting company to pay £1.7 million to a customer after it withheld his jackpot by claiming that he won because of a “defect” in an online game.
Andrew Green, 54, had told the High Court in London that he felt “robbed” when Betfred officials said that they would not pay out after his win.
When did bets and betting winnings etc become justiciable?
I thought the deal was that you couldn’t use the courts to enforce gambling debts and that’s why, also, gambling was income tax free?
Which bit am I missing here?
Well it’s regulated so my hypothesis would be… you ain’t getting a licence next time around if you don’t pay your customers.
2005 Gambling Act from memory
Gambling is income tax free because gambling losses must be much greater (as bookies make a profit after costs) and you wouldn’t want those being offset against your income.
Gambling versus Fraud?
The company sounds a bit like Monty Python’s “No Claims” insurance policy: call The Bishop!
Gambling debts may or may not be enforceable, I don’t know, but the issue here is not enforcing the debt but claiming that does or doesn’t exist.
He was playing the machines, not the dogs, nags or footie coupons. Those boxes are fairly tightly regulated, so I’m not sure how BetFred thought that claiming a software defect was ever going to work in their favour. (I think BetFred actually have form for denying large payouts – but it was some ago. Also some time ago, was when the firm decided to pay out on Manchester United winning the league really quite early in the season – and they promptly failed to win it. Might have been Chelsea instead).
There’re T&Cs attached to each bet – including the maximum pay out on offer, which varies, but can be limited to a quarter or half a million. There’s an arbitration process as well, which (again some time ago) ended up in the courts.
Bookies aren’t really that interested in welshing – very bad for business. But large payouts are just rare – and it’s much better publicity to pay and announce the fact, rather than whinge and moan.
Since the T&Cs and the arbitration process exist, then the bookies are going to get dragged through the courts every once in a while, regardless of anything else.
And also the act of gsmbling is taxed, though moved from the punter at the counter to the bookies as a corporate entity. Removing the “would you like to pay tax, sir?” bit and leaving youngsters perplexed at a certain line in Bottom.
Doesn’t the lottery enforce a top rate of tax, 50% or something, across the board on everyone who plays, whether they win or lose.
The tax case precedent dates from 1925. Graham v Green in which a person whose income arose almost entirely from betting on the horses was held not to be engaged in a ‘trade profession or vocation’ and so was not taxable on his winnings. It hasn’t really been queried in tax since.
Fast forward to 2014 and professional poker player Tony ‘the Hitman’ Hakki was taken to court by the Child Support Agency as they claimed he should be paying child support from his winnings. Clearly having no shame or sense of responsibility, Hakki fought the case and won. His poker winnings were not income for CSA purposes. – Graham v Green was cited in the judgement.
This is in contrast to the position in the USA where in 1986 poker player Billy Baxter took on the IRS over whether his poker playing amounted to a “trade or business”. Under USA tax laws, Baxter was taxable on his winnings anyway. He WANTED it to be treated as a “trade or business” as that allowed him to claim more deductions and to be taxed at a lower rate. The IRS obviously opposed him claiming Baxter’s income was not ‘earned’ but ‘passive’ but a Nevada Judge ruled in Baxter’s favour. The Judge famously commenting “I find the government’s argument to be ludicrous. I just wish you had some money and could sit down with Mr. Baxter and play some poker.”
+1 Andrew
Who knew tax law could be so interesting? 🙂
The management of Betfred presumably believes that all publicity is good publicity. I wouldn’t bet on it.
“Fast forward to 2014 and professional poker player Tony ‘the Hitman’ Hakki was taken to court by the Child Support Agency as they claimed he should be paying child support from his winnings. ”
Does that mean if you won the lottery you wouldn’t be liable for CSA payments based on the amount won, just the income you derive from the capital sum?
I’m surprised CSA is not based on “ability to pay” or some such, not just income, but I’ve no knowledge of this area…
So someone won playing an online casino. This falls under the heading of things that didn’t happen so much that they unhappened things that actually did. DEFINITELY a HUGE defect in the online game. Next up, invest your life savings in forex and oil futures, step this way please…
https://www.pokernews.com/news/2008/02/players-cash-betfair-programming-glitch-sng-4705.htm
Software glitches are not unknown in the online gambling field as the above story describes. In the more recent case it seems the punter won the jackpot 3 times which puts me in mind of the film “Casino” not to mention the recent Twin Peaks reboot.
I imagine Betfred will have had strong words with their software people although maybe not as strong as those used by Mr De Niro.
Didn’t Crockford’s (or some casino) take a Saudi(?) to court a while back, arguing as a foreign national he wasn’t protected under UK law and should pay them back the money they’d lent him to gamble and lose?
Can’t remember the outcome. Andrew? Anyone?
https://www.bbc.co.uk/news/uk-41751208
Phil Ivey, arguably the world best/most famous poker player, had his winnings of £7.7m successfully withheld by Crockfords.
Not sure if this is the case you were thinking of.
I’m almost certain that he’s not quite the innocent punter that he’s made out to be – nor made himself out to be. And betfred know this, and know he knows this, and he knows they know… that’s why they didn’t pay out. To see if he blinked.
Loopholes “loops” in casino games are a licence to print money and people I know have made some £100,000s, people made millions back in the day. I’ve made a few £££ myself.
There’s 2 rules about loops, 1, you don’t tell anyone outside a circle of trust, and 2, you don’t flag it to the operator either on live chat or by taking such a massive win that it’s certain to be checked and kill the golden goose like this moron did (although a moron richer than me)
It’s not necessarily software faults that lead to loops, the trick to loops normally involve some creative lateral thinking in the betting and wagering system, to get around it and turn the game in your favour. They seem obvious when you see them but it isn’t obvious to the operators or software developers who don’t think in the same way.
I know there’s a good loop out there that’s being milked for £5-10k a month right now. I can’t find it grrr. I’ve got a smaller one on the go which does ok.
There was a similar case a while back when coral refused to pay out on a slot loophole. It didn’t get as much attention as the money withheld was £1000s to 100s of people rather than an eye catching million to one person, but the total payout was bigger, many millions
The regulators told them – it was your game, your rules, nobody hacked it etc, payout or lose your licence. So they paid out
I once shared a house with a cockney ‘likely lad’, who said he could make money on the slot machines. So we went to the local arcade (Ealing high st) and he went to work on it, went down a few quid, but ultimately recovered, made about 3 quid for 2 hours hard work. So, it can be done, but its not lucrative. I was surprised, had thought it an urban myth, but now I’ve seen it done.