Obituary: Sponsiones Ludicrae

ON THE ENFORCEABILITY OF GAMBLING CONTRACTS, AND AN OBSERVATION ON CHEATING UNDER THE GAMBLING ACT 2005 FURTHER TO MAJEED v R [2012] EWCA Crim 1186

One of the questions that I am asked from time to time is about the enforceability of gambling contracts. Typically, this sort of thing presents as a query as to whether someone can take a bookie to court for failing to pay out on a slip. For centuries, a doctrine known as “sponsiones ludicrae” operated, which in short terms meant that gambling contracts were unenforceable. This can perhaps go back as far as the Gaming Act 1710 and is centred around the historic idea that there should be a ban on enforcing gambling debts under the law due to moral reasons. The 1710 Act extended to “security” rather than “stake”, which, it seems, was Parliament’s attempt to preserve the inheritance of the aristocracy!

Section 18 of the Gaming Act 1848 made gambling contracts void and this was extended to agents betting on behalf of a third party in the Gaming Act 1892.

There were some historic difference between Scotland and England on this point, but in any event all of that is now redundant due to the terms of s.335 of the Gambling Act 2005 which states rather neatly:

“The fact that a contract relates to gambling shall not prevent its enforcement”

On the flip side of enforcement of a bet, is the voiding of it. The 2005 Act allows the Gambling Commission to void a bet where satisfied that it was “substantially unfair” although the power only applies within a period of 6 months following the bet. Note that this is not, in my view, a 6 month deadling for lodging a claim but a deadline for the order to void the bet being made.

Noting that such contracts are challengable, I would observe there are specific routes for a punter to challenge unpaid winnings or retrieving a stake they believe has been taken unlawfully. This could involve appeals to IBAS or another third party arbiter, or if the bet is made remotely, perhaps to foreign regulators such as the Gibraltar Gambling Commission. Such action requires specialist advice.

I would also pause to note that the doctrine has also been abolished in terms of that other form of gambling, spread betting. Spread betting is not treated as a form of “gambling” in the sense envisaged by the 2005. It is instead treated in law as a sort of “contract for differences” and is regulated separately under the Financial Services and Markets Act 2000 (see s.22 for the full definition). The “watchdog” in relation to spread betting is therefore not the Gambling Commission but the Financial Services Authority. Section 412 of the 2000 Act abolishes sponsiones ludicrae as regards spread betting.

AN OBSERVATION ON THE OFFENCE OF CHEATING
The 2005 Act has also created a specific offence of cheating. Section 42 of the Act says that an offence is committed if a person cheats at gambling, or does anything to enable or assist another person to cheat at gambling. It makes no difference if the cheating does not achieve the desired effect. Cheating is taking to include “actual or attempted deception or interference in connection with (a) the process by which gambling is conducted, or (b) a real or virtual game, race or other event or process to which gambling relates”. The maximum sentence for conviction of this offence is 2 years imprisonment “for conviction on indictment”, or a fine, or both, and on summary conviction imprisonment for a maximum of 6 months in Scotland (51 weeks for the England & Wales) or a fine or both.

The offence is an extension of that contained in our old friend the Gaming Act 1848, in that it now captures colluders.

There is an interesting examination of these provisions as regards territoriality in the case of Majeed v R [2012] EWCA Crim 1186. This is a case arising from “spot fixing” in cricket which attracted national media headlines at the time. An defence was raised concerning the fact that the gambling which occurred as a result of the cheating had taken place unlawfully abroad and that the offence could not be borne out given the jurisidiction of the Act extended to England, Wales and Scotland only. The gambling had been unlawful, and had taken place abroad. The Justices rejected this: the offence is directed at the persons doing the cheating and the cheating need not be in the gambling itself but the process or event on which the gambling was directed (in this case fixing cricket matches in England). The cheating very much had occured within the jurisdiction of the Act and therefore the offence could apply. The Justices summarise this as follows: “The “fix” was organised in England, the matches which were the target of the “fixing” took place here, and the rewards for participating were also paid here. In short the criminal conduct prohibited by s.42 occurred within the jurisdiction”.

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About Stephen McGowan

Leading Scottish licensing solicitor at TLT. Chairman of BII Scotland.
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