Written evidence submitted by Daniel Flanagan (GA 33)

I am responding to your consultation on your inquiry into gambling. I am a regular user of online gambling websites and I am very worried about the lack of effective regulation of this area. I refer in particular to online betting exchanges, which are becoming the most popular form of sports gambling across the internet.

My primary concern is Betfair, who have recently announced plans to introduce a 60% charge on winning accounts over £250k net lifetime p/l. As I understand it the Gambling Commission has a duty to uphold fair standards of gambling but this does not appear to be a fair system. The "premium charges" of Betfair were introduced around 2 years ago and are a penalty on winning customers, which I believe is unfair. I cannot think of any other service or business that penalises, or is allowed to penalise, customers who legally and fairly purchase services from an organisation.

Furthermore, I would point to the flaws in the system as it currently operates and why it does not achieve the aims it is supposed to, therefore only increasing its puntiive and unfair nature:

A customer has a very good year and wins £250k net profit. Betfair say thanks very much, we'll have 60% of that - i.e. £150k. Next year, things take a turn for the worse and the customer loses £250k.

So his net p/l over the two year period is £0.

But he's paid 150k to Betfair and is therefore - £150k.

Betfair should rebate him the 150k because over the two year period he has not met their threshold of being over 250k up.

However, there is no rebate. It’s just tough luck for the customer.

In addition, Betfair are introducing these charges on someone's lifetime winnings. However, people would have been gambling for many years based on the system as it has been. Had they known that these charges were going to apply in the future, they could have changed their betting paterns or used other services. Any introduction of charges should only operate from the time they are announced and not be applied retrospectively.

June 2011

Prepared 29th July 2011