Check the small print: the key lessons from the Betfred jackpot case

In what some may call a ‘David versus Goliath’ moment where an online casino player took on high street and online bookie Betfred for refusal to pay out his jackpot winnings, the case highlighted two important areas for operators to think about: the wording of terms and conditions and how costly technical faults can be. The Betfred slots case resolved in the UK High Court in April revolved around a software glitch that allowed a Betfred player, Andy Green, to rack up winnings of £1,722,500.24 while playing a side game on the Frankie Dettori’s Magic Seven Blackjack game. The game was provided by Playtech. Claiming the winnings were the results of game play malfunction (see boxout), Betfred refused to pay Mr Green the winnings and referred him to the terms and conditions on its website. Green sued and the case went before the High Court. The he said/she said of the case revolved around the phrasing on the Betfred site which ran: “Customers may withdraw funds from their account at any time providing all payments have been confirmed.” Green said Betfred had committed a breach of promise; the company defence was that this clause related only to the withdrawal of funds (not chip balances), that there were exclusion clauses, one in the main T&Cs, regarding game defects and that the rules of the game excluded liability as they provided that bets and payments would be void in the event of a malfunction.

The judgment findings

In finding against Betfred, Judge Mrs Justice Foster said the wording employed in the T&Cs was inadequate. The judge commented: “There is no definition of the meaning and extent of the word ‘malfunction’ and absent a clear definition the natural meaning of the word in my judgment does not connote the circumstances here.” The game, effectively, functioned “flawlessly”, albeit producing odds which were not intended. “What happened to Mr Green was, as Betfred admitted, in fact possible absent the ‘glitch, just extremely unlikely,” the judge wrote. She also said Betfred had failed to adequately signpost its exclusion of liability and “a failure to highlight the meaning and effect intended”. “The unhelpful, often iterative presentation in closely typed lower-case or numerous paragraphs of capital letters meant that the relevant clauses were buried in other materials. These features are exacerbated by the fact that the player must click through and scroll online, searching out what appears to be relevant to him.” Lastly, the judge, in relation to the Consumer Rights Act (CRA), said that it relies upon the contract terms between a trader and a consumer to be transparent and fair. While she was prepared to accept that Mr Green was an “experienced and competent player of internet gaming”, the nature of the liability exclusion being sought would require a “clear explanation and ‘signposting’ which would have involved a full and clear description of the possibility of a hidden technical defect, and its potential consequences for the gaming contract”. “Unambiguous language that made it clear Betfred intended to void a payout in such circumstances was necessary.”

Care and particularity

The lawyers say the industry has been given some clear indications of what it can do to improve its T&Cs in light of the judgment. Claire Livingstone, a senior associate at Wiggin, says that while the case does not mean that exclusions of liability to pay out winnings in the event of a game error are necessarily going to fail, the “high bar” for successful exclusion of liability in these circumstances has been strongly emphasised by the judge’s findings. The first area to focus on is clarity. “Terms and conditions must be clear and readily understandable to the average player,” she says. Anna Soilleux-Mills, partner at CMS Law, agrees, suggesting that care needs to be taken to specifically address key issues such as the different types of error. “Broad, vague and ambiguous exclusions of liability are much less likely to be effective,” she adds. Part of the issue is the piecemeal way that T&Cs have been added to and amended over the years, suggest David Clifton, a legal consultant at Clifton Davies, so that they become “lengthy and unintelligible” to all but legal experts. “That problem becomes even more exacerbated when, as I have seen in numerous cases, an operator’s T&Cs contain inadequate or contradictory definitions and are littered with typographical, numbering and layout errors,” he adds. Livingstone agrees presentational factors like consistency, structure, numbering, font size, line spacing and style are “not irrelevant or merely cosmetic”. “If terms and conditions are put to the test, these factors will go towards the question of transparency and fairness, and therefore enforceability,” she remarks. In the judge’s words, in order for an exclusion of liability to work in the circumstances that arose in this case, the wording would need to be put across with “great care and particularity”. None of this is – or should be new – to UK-licensed operators, suggests Clifton, who points out that the Gambling Commission’s LCCP regulations requires licence holders to make available to their customers in an “easily accessible way the contractual terms on which gambling is offered”. “Key terms, including where operators seek to exclude or limit their liability, should be emphasised by way of a separate ‘plain English’ summary at the sign-up stage so it can justifiably be said that customers were adequately warned from the outset and did not have to wade through multiple pages of complex legal jargon to find the relevant provisions,” he adds. Moreover, as Kirsty Caldwell, founder and director at Betsmart Consulting, points out, issues around T&Cs were brought up in 2016 by the CMA which had highlighted the need to be “more than aware of their obligation to ensure that T&Cs are clear, appropriate for their audience, as succinct as possible, easily understandable, with key clauses highlighted”. Livingstone suggests that, although there are never any guarantees of enforceability when it comes to exclusions of liability against consumers, “relatively modest steps” can and should be undertaken by UK operators in response to the case, albeit that the particular circumstances that arose were “fairly rare”. These steps include reviewing the player registration journey and acceptance processes, providing a summary of key terms that are made clearly known to the player at account registration and that can be easily accessed on an ongoing basis, and considering the introduction of clear warnings that ‘wins’ will be subject to checks and will not be paid if found to be the result of a fault or defect. The publicity given to the case and the findings themselves should, by right, already be having an impact on the working practices of UK operators, suggests Clifton. “Criticisms of the type made very forcibly by the judge in this case should already have led other UK-licensed operators to look very carefully at their own T&Cs to ensure they can lawfully withhold payment of winnings to customers, not only when game software malfunctions and errors occur but also in other circumstances where they want to legitimately exclude or limit their liability,” he says. “It should also serve to warn off newer entrants to the market from taking what some might otherwise think is an easy and inexpensive route of plagiarising other operators’ T&Cs in order to concoct their own.” Meanwhile, Caldwell also thinks the regulator might learn some lessons, suggesting there could be ways to further strengthen the annual games testing audit requirements to reduce the likelihood of technical errors negatively impacting the consumer. The embarrassment of the Green case will soon pass. But the lessons for the industry are plain: it needs to be paying even greater care and attention than previously on issues like the T&Cs lest it gets caught out again and gambling’s reputation for fairness suffers more harm. Betfred is paying the price this time but the sector will pay a heavier price if more failings come to light. When contacted for this article, Betfred repeated that it will “abide by the court’s decision and not appeal”. Playtech offered no comment.