Written evidence submitted by Paul Mundy (GA 57)


1. I am making this submission as a private individual and my comments are from my perspective as a punter.

2. I believe that the Gambling Commission ("GC") is falling short in its objective that gambling is conducted in an open and fair manner and I do not believe that the GC has been effective in properly regulating bookmakers to ensure that they treat punters fairly at all times. The GC does not seem interested when members of the public raise serious complaints about bookmakers which question the bookmakers fitness to hold a licence.

3. The purpose of my submission is to highlight areas of concern where I feel that bookmakers in the UK are not being effectively regulated.


· Bookmakers withholding payment of winnings from customers

· Bookmakers’ failure to deal quickly with straightforward betting disputes and the role of IBAS

· Data protection issues – can the bookmakers be trusted?

· Criticisms of the Gambling Commission as an effective regulator

· The concept of whitelisting is deeply flawed and does not adequately protect UK customers

· Conclusion

Bookmakers withholding payment of winnings from customers

4. Bookmakers often make it difficult for winning gamblers to collect money from them. One example is of a winning punter who had to visit the same shop eight or nine times just to collect a little over £1000. I assume that this was a deliberate ploy to frustrate the customer and discourage them from betting with that particular company. This is not an isolated case by any means and other gamblers have reported numerous situations in which they have had to spend an unnecessary amount of time collecting winnings. Very often the excuse given is that they are understanding instructions from head office to pay any money above a small float into the bank for security reasons. In certain cases the customer may be tempted to re-stake his winnings on new bets without actually receiving the cash in his hands even though his intention was simply to go to the betting shop, collect his winnings and leave.

5. I recall that the original draft Licence Conditions and Codes of Practice ("LCCP") contained a clause relating to the issue of "Payment on Demand" but I believe that this was taken out because of submissions from the Association of British Bookmakers ("ABB") and possibly other parties. If there had been a clause in the LCCP giving clear parameters on payment of winning bets then customers would be able to complain to the GC that a bookmaker was in breach of its licence conditions. I would like to see clear parameters which for example might state that payments of up to £1000 should be made available in cash by close of business the following day, up to £5000 within three days, up to £10,000 within five days etc. Larger amounts, which may require the customer to accompany the shop manager to the bookmaker’s bank and receive the winnings in the bank itself for the bookmaker’s security, could have a limit of, say, seven days. Failure to adhere to these time limits would trigger a reporting requirement from the bookmaker to the GC and be acknowledged by the GC as grounds for a complaint which would be taken seriously. In the absence of a specific clause in the LCCP, the issuing of guidelines on this matter would be a welcome improvement.

6. There have been occasions where certain bookmakers have tried to make it difficult for winning punters to collect winnings by insisting on ID and even proof of address before releasing payment and refusing to make payment unless these conditions are met, even though the bookmakers own terms and conditions make no mention of any such requirements. This happens even when the punter is well known to the staff and is known to have been the party who placed the bet. For genuine reasons of privacy and security the customer may not wish to produce ID and especially proof of address, particularly if he is in the habit of betting large amounts of cash in that shop. When the GC has been contacted, the customer has initially been told to contact IBAS. However, IBAS deal with disputes over the amount of a bet payout, but do not deal with issues over the method of payment or conditions imposed with regard to payment. When this was pointed out to the GC the customer was then advised to make a complaint in writing to the bookmaker even though this would defeat the whole issue of privacy. Ideally in a situation like this there would be a GC enforcement officer who would say to the bookmaker "Stop mucking about. Just pay the customer."

Bookmakers’ failure to deal quickly with straightforward disputes relating to bets and the role of IBAS

7. I have been aware of several occasions in which a dispute relating to the odds or the payout amount of a bet has not been dealt with in a fair manner by the bookmaker. Sometimes when the matter is clear cut in the customer’s favour the customer will be forced to contact customer services and often have to engage in lengthy email exchanges just to get the bookmaker to adhere to its own rules or terms and conditions. I firmly believe that very often this is a deliberate ploy on the part of the bookmaker to discourage winning customers from pursuing the claim. If the dispute remains unresolved the customer concerned has the option of making a claim to IBAS or pursuing the issue in court.

8. However, if the sum involved is fairly small it is simply not worth the hassle and many genuine claims are not pursued for this reason. Some bookmakers, I feel sure, use this to their advantage.

9. I have had betting disputes myself where the bookmaker has not adhered to their own published rules regarding the settlement of a bet and has tried to pay me less than I was due. In one case the Area Manager of a particular firm had decided that he was not going to pay me the full amount due by not applying their own rules to the settlement of my bets. I felt strongly that he was behaving in a manner contrary to the "fit and proper" requirements of the GC. However, when I complained to the GC about the issue, stating that I felt the Area Manager was behaving in a manner which called into question his fitness and propriety to hold a personal licence, the GC’s response was that they would not be able to look at any complaint until it had been looked at by IBAS. Since the case never went to IBAS (it was resolved almost instantly once I had involved the media) the GC never looked into it.

10. I understand that IBAS does not publish detailed information on how many complaints it receives in relation to each bookmaker and how many of these complaints are ruled in the customers’ favour. However, I understand that the GC is given the necessary information to enable them, if they wish, to see which bookmakers had a proportionately higher level of complaints and/or a higher percentage of complaints ruled in the customers’ favour. The number of complaints could be looked at in proportion to the number of bets taken or the number of betting shops they operate.

11. A higher proportion of complaints compared to the average bookmaker and/or a higher proportion of complaints ruled in the customers’ favour would indicate cause for concern. The former would indicate that perhaps the way the bookmaker conducts its business is leading to too many complaints. The latter would indicate that the bookmaker is not dealing with genuine complaints properly and is perhaps relying on the fact that customers will not pursue the dispute further.

12. Among many gamblers IBAS does not have a good reputation. Historically, IBAS has been regarded as being in the pockets of the bookmakers (since it was funded by them) and that it will very often only rule in favour of the customer if there really is no other option. Their decisions have been criticised for their lack of transparency, fairness and consistency. Cases which are clear cut have been ruled wrongly. Some have suggested that cases are not given proper consideration because of a lack of resources and the process by which the submissions of the customer and the bookmaker are dealt with also draw criticism. With an IBAS complaint, the customer complains and then the bookmaker responds with his representations to IBAS and then IBAS rule on the case. However, the customer has no right to counter the submission made by the bookmaker as he would in a court of law. Between the customer and the bookmaker, the bookmaker has the last word and the suspicion among many gamblers is that IBAS take the bookmakers word at face value without proper scrutiny, resulting in unjust rulings.

13. IBAS publishes the details of a handful of selected cases in its annual report to illustrate its work. However, many gamblers believe it would be beneficial for punters to see the details of many more cases or even all cases. Such transparency would enable proper scrutiny of the decisions which IBAS makes behind closed doors.

14. Since September 2007, when wagers became legally enforceable, many gamblers have chosen to issue court proceedings to settle gambling disputes with bookmakers rather than making a claim through IBAS. I do not believe the GC requires bookmakers to report on the number of court summonses they receive in respect of gambling disputes with customers. However, I feel strongly that they ought to do so in order that the numbers can be properly monitored in the same way I have suggested for complaints submitted to IBAS. The data on the number of complaints should be made public.

15. I would like to see the GC develop a Code of Practice relating to different types of bets in order to reduce the number of complaints that may arise regarding bets. This may assist in resolving betting disputes more quickly and discourage bookmakers from failing to properly address genuine complaints as quickly as possible.

16. Data protection issues – can the bookmakers be trusted?

17. When the GC has been contacted about Data Protection issues, they have simply suggested that the customer should contact the Information Commissioner’s Office ("ICO").

18. I have become very concerned by developments which I have become aware of in the last year or so with regard to betting shops’ use of CCTV images of customers. For years bookmakers have kept CCTV images of criminals who may affect their business: robbers, fraudsters, people who threaten or assault staff or who vandalise their property and that is reasonable. However, several bookmakers now circulate CCTV images within their organisation of people whose only "crime" is to be a winning punter. One of the largest bookmakers even has a dedicated system on screens accessible to shop staff with images of many "unwanted" punters. None of the betting shop chains who engage in this practice are open about their use of CCTV for this purpose. The signage in shops usually mentions that the CCTV is for the purpose of crime prevention, the security of customers and staff, as well as staff training. No mention is made of the fact that CCTV may be used to identify successful customers and prevent them from placing legitimate bets. I am aware of at least one case where staff at a betting shop allowed staff from another bookmaking firm to view images of particular customers in order to "compare notes". This sort of thing is difficult to prevent if the bookmakers themselves make CCTV images of legitimate customers available to hundreds or even thousands of their staff. When the GC were contacted about this, their response was to suggest contacting the ICO. In turn, the ICO’s response was to say "that sounds a bit heavy-handed" and to suggest contacting the companies directly about the issue.

19. I wonder how long it will be before betting shop customers in the UK are subjected to Las Vegas-style facial recognition software if this practice is left unchecked. I would like to see the GC work with the ICO to investigate this practice.

Further criticisms of the Gambling Commission

20. The GC has a very poor reputation among gamblers. They are regarded as ineffective and not interested in genuine complaints against bookmakers. I have contacted the GC on several occasions in the last three years about what I felt were serious complaints against bookmakers and each time they have failed to give what I consider would be an adequate response. I am not sure whether the staff who answer the telephone calls and respond to the emails can actually tell the difference between a trivial or frivolous complaint and a serious one. Very often their stock answer is to say "contact IBAS" which gives me concern that the GC’s staff is holding IBAS in too high a regard and that they do not actually understand what should be required of a regulator.

21. The GC seems only too happy to pass the buck to other agencies even where issues arise which question the integrity of bookmakers holding UK licences. It is my view that the GC should take action against licence holders in the case of misleading advertising. I am aware that it is the responsibility of the Advertising Standards Agency ("ASA") to deal with advertising but the only sanction they have is to instruct the advertiser not to run that advert again whereas an effective regulator should look very dimly on companies misleading their customers and take appropriate action including, perhaps, fines or other sanctions. If there is any outside agency that can possibly deal with an issue the GC will pass it on rather than address the matter themselves or decide to work with another agency on a particular issue.

22. Where gamblers have raised issues relating to bookmakers’ unfair contract terms, the GC has suggested that the customer contact the Office of Fair Trading ("OFT"). However, the GC should thoroughly check licenceholders’ Terms and Conditions to ensure that they are indeed fair, rather than relying upon members of the public to contact the OFT themselves. One astonishing clause which appears in the terms and conditions of Canbet (who are regulated by the GC) states that "If the cash balance in a dormant account remains unclaimed for a period of six (6) months, any sums contained therein shall be forfeited to the Sportsbook." The fact that the GC allows this is akin to the FSA allowing a stockbroker to confiscate any unused cash balances left in customers’ share trading accounts for more than six months which is unthinkable.

23. Rightly or wrongly, many people perceive the relationship between the GC and the large bookmakers as too cosy, leading to a laissez faire approach to their regulation.

24. When the GC has been contacted about issues relating to gambling being conducted in a fair and open manner and issues relating to the integrity of bookmakers the GC does not seem interested. They should have a tougher approach to regulation and should be more prepared to impose financial and other sanctions on bookmakers who do not behave with integrity.

25. The Board of Commissioners appears to consist of the great and the good. How many of the Board have placed a bet recently or have visited betting shops or casinos? I see that one Board member, Ben Gunn, has listed in his "interests" the fact that he has four betting accounts, which presumably means he has placed a bet. How much do the members of the Board really know about gambling? My concern is that they may not know very much. I feel that there should be at least one person on the board who really knows what the bookmakers are like and what tricks they get up to and has a good understanding of the issues experienced by gamblers, ideally through first-hand experience. Is anyone performing this role currently? If not, this should change as soon as possible.


26. The issue of whitelisting non-UK jurisdictions must be addressed. In the view of many gamblers in the UK the regulation in these jurisdictions is not of an acceptable standard. For example, the Betfair "happy hour" casino promotion fiasco in November 2010 occurred under the jurisdiction of the regulatory authorities in Malta. The issue was widely publicised and the case was serious enough for the UK’s ASA to uphold the complaints made in respect of the promotion, and for the respected website to label Betfair a "rogue casino". However, as far as I know, the Maltese regulatory authorities have not made public any criticism of Betfair’s actions and, more importantly, the customers concerned do not have the benefit of being able to sue in the UK courts for the amounts confiscated from them which I understand amounts to several million pounds.

27. Also well publicised was the dispute between Betfred’s on-line operation and Barney Curley’s associates in connection with his "betting coup" in May 2010. Despite the fact that the British Horseracing Authority ("BHA") has stated that no wrongdoing occurred on Mr Curley’s part, the Gibraltar Regulatory Authority has announced that it fully endorses Betfred’s decision to refuse to pay some £800,000 in winnings. In addition, Sportingbet, who are regulated in Alderney, unilaterally voided bets placed by Mr. Curley’s associates.

28. These whitelisted jurisdictions do not protect gamblers’ interests and because the wagers are regulated in these jurisdictions customers with a dispute do not have the automatic right to sue in the UK Courts. I feel strongly that a thorough review of whitelisting should be undertaken and would like to see that a condition of allowing non-UK regulated operations to advertise in the UK should be that any wagers placed by UK residents should be subject to UK law. If a party places a bet from the UK they should be able to enforce that contract in the UK courts too.

29. It strikes me as peculiar that a number of telephone betting operations are regulated in other jurisdictions even though the call centre that takes the bets is situated in the UK. For example, how can it be right that if I telephone Skybet (for example) and place a bet from my home in England, and speak to a Skybet representative in Leeds, that wager is regulated in Alderney rather than the UK? Many on-line gambling operations have their offices in the UK and escape UK regulation merely because they have their servers situated in a data centre in a foreign jurisdiction. This does not seem logical to me.

In conclusion

30. I have outlined areas where the existing regulatory framework does not adequately protect customers and suggested ways in which the GC can be a more effective regulator.

31. I have considerable experience of gambling in the UK and I would be happy to be contacted or to be interviewed if this will assist the Select Committee.

June 2011

Prepared 1st August 2011