Betfred pays out £1.7 million after gambling on its inadequate terms and conditions

A recent High Court judgment in the UK found in favour of a £1.7 million pay-out to one of Betfred’s online gambling customers following a software glitch which unintentionally boosted the player’s odds. The case serves as a stark reminder to the gambling industry of the costly consequences of terms and conditions that are obscure, unclear and inadequately brought to the player’s attention.

Background

On 26 January 2018, Mr. Green spent five and half hours playing a side bet feature within an online game called ‘Frankie Dettori’s Magic Seven Blackjack’ on Betfred’s mobile casino app. At the end of his gaming session, the game showed that Mr. Green’s betting chips came to a value of just over £1.7 million.

Upon contacting customer services to withdraw his winnings, Mr. Green was informed by Betfred that due to the significant sum involved, an additional check would have to be carried out with the third-party game provider, Playtech, before he could withdraw the funds. Playtech subsequently informed Mr. Green that there had been a fault in the development of the game, meaning that continuous play provided much better odds of a player winning than had been intended. Consequently, Betfred refused to pay out the winnings.

Mr. Green commenced legal action, relying primarily on the breach of a clause in Betfred’s T&Cs stating that players could withdraw funds from their account at any time provided that all payments had been confirmed. In its defence, Betfred argued that:

1. the clause relied on by Mr. Green related to the withdrawal of monies paid into the account by the player, and not to the withdrawal of chip balances;
2. based on the various exclusions of liability contained in Betfred’s general T&Cs, the app-related EULA and the game-specific rules, the defect in the game meant that Betfred was not liable to pay out the winnings; and
3. (failing the above arguments) the contract between the parties was void on the basis that the parties were operating under a mutual mistake during Mr. Green’s gaming session.

Key findings

The Judge considered and ruled on three essential questions.

1. Meaning: what did the exclusion clauses actually mean?

The Judge held that the wording of each of the exclusions of liability relied upon was inadequate and not apt to cover the circumstances of the case. The clauses did not explicitly make clear that bets would be voided in the event of an error (and therefore the obligation to pay out any winnings would not arise). Furthermore the clauses contained a reference to ‘malfunction’ without properly defining this term. In the absence of any further definition, the Judge did not consider the fact that the game had produced an unintended set of odds (whilst otherwise operating flawlessly) to amount to a malfunction.

2. Incorporation of terms: were the exclusion clauses sufficiently brought to Mr. Green’s attention?

The Judge found that:

• • the significant exclusions of liability on which Betfred sought to rely (and their intended meaning and effect) had been inadequately signposted to Mr. Green;
  • the presentation of the clauses (which were closely typed in lower-case or in numerous paragraphs of capital letters) meant that the relevant clauses were ‘buried’ amongst other materials; and
  • it was unreasonable to expect players to spend significant time trawling through repetitive documentation which may contain irrelevant wording in order to locate key terms.

Consequently the purported exclusions were not validly incorporated into the contract between the parties.

3. Reliance: as a matter of consumer law, were the exclusion clauses enforceable?

The Judge found that:

• • the language used was obscure and unclear to the average and informed player;
  • the drafting of the terms was iterative, repetitive and contained typographical mistakes;
  • the obligation on the player to consult an attorney if unclear over the meaning was an ineffective attempt to shift the burden of providing clear language and proper warning; and
  • the obscurity of the language, the context of the contract and the failure to adequately signpost the exclusion clauses and explain their consequences to the players were inconsistent with the principle of fairness.

Consequently, the Judge held that the clauses relied upon were neither transparent nor fair, meaning that under the Consumer Rights Act 2015, Betfred was not entitled to rely upon them.

Practical takeaways

There are a number of practical measures gambling operators can take in order to avoid situations like this in the future, as follows:

1. review your T&Cs regularly and ensure that any onerous terms (such as exclusions of liability) are clearly signposted to the consumer in an up-front and transparent manner;
2. avoid the use of vague “catch-all” language and ensure that the scope and intended effect of any key terms is clearly set out (with use of appropriate defined terminology where applicable);
3. format the user T&Cs with readability and intelligibility in mind – avoid tightly-spaced / lengthy paragraphs and the use of obscure legal language; and
4. consider the user journey involved in accessing and playing games and whether this is structured so as to bring sufficient attention of the user to any key terms.

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