A multimillionaire “problem gambler” who blew nearly £1.5m on football wagers is suing Betfair for his money back in a landmark case, claiming it was under a duty to protect him from himself.
Buy-to-let property tycoon Lee Gibson told a court he placed more than 30,000 individual wagers through betting exchange Betfair during a “prolific” gambling period between 2009 and 2019.
Although he said he initially found it “enthralling and exciting”, his losses became “unsustainable”, and in March 2019, his account was suspended for good.
Mr Gibson, 47, of Leeds, went on to sue Betfair, the world’s largest betting exchange, alleging that it should have known he was a “problem gambler” and was under a duty to stop him sooner.
The case was rejected by a High Court judge last year, but his bid for about £1m in damages has now gone on to be heard this week by three top judges at the Court of Appeal.
Lawyers say the case could have huge ramifications for the online betting industry as it will clarify what duties online betting companies owe to gamblers.
His barrister, Yash Kulkarni KC, said Mr Gibson’s betting was focused on the tricky “correct score” football markets, sometimes in “obscure” games and in sums up to £20,000.
He said the judge should have found that Betfair “knew or ought to have known” that Mr Gibson was a “problem gambler” and that, because it treated him as a VIP with his own individual “relationship manager”, it had assumed a duty to look after him properly.
“The evidence showed that Betfair knew or had information available to them showing that Mr Gibson was chasing his losses, had borrowed money or sold something to gamble, and was gambling at a level beyond that which he could afford from his income after tax and expenses,” he said.
The court heard Mr Gibson, despite leaving school at 16, had made himself a multi-millionaire by buying and renovating properties in the Leeds area.
At its highest, his portfolio included 16 houses, which were rented to students, but some were later sold or remortgaged as his losses piled up.
He had begun gambling – mostly on football – using the Betfair exchange in 2009 and, although his account was at times in credit, by the end of 2012, he had lost £100,000.
His losses had grown to £500,000 by the end of 2015, £1m by January 2018, and, in March 2019, when Betfair suspended his account, stood at almost £1.5m.
He was treated as a VIP customer, being offered incentives such as hospitality at football matches and golf invitations, although the incentives decreased over time.
When quizzed under anti-money laundering rules about the source of his gambling funds, Mr Gibson explained to Betfair that he was a landlord with a substantial portfolio of properties.
Betfair eventually dropped Mr Gibson as a client in 2019, but he went on to sue, claiming they “knew or ought to have known” about his problem and should have stopped him sooner.
By treating him as a VIP client with an individual manager, the company had also assumed a responsibility to look after him, which it had failed to meet, his lawyers claimed.
He claimed in damages the amounts he lost while gambling in the six years prior to filing his court claim in 2021, totalling around £1m.
At the end of the trial of the case last year, Judge Nigel Bird said he was not convinced that Betfair should have known about his gambling problem, given that he had tried to hide it himself.
“Mr Gibson consistently and often reassured Betfair that he was able to fund his gambling, including his losses, and none of the information he provided to Betfair painted a different picture,” he said.
“The fact that he consistently satisfied anti-money laundering checks makes it impossible for Mr Gibson to argue that the size of his losses was, of itself, enough to raise reasonable concerns.
“Indeed, even after the trial, there is no real suggestion that Mr Gibson could not afford his gambling.
“He could, at least on the face of the information he gave to Betfair, afford to fund his gambling. He misled Betfair about his gambling and it is very difficult to identify a problem gambler who is not being honest.
“In my view, Mr Gibson did not simply fail to share information about his gambling problem, he took steps actively to hide it and to portray to the world at large, and to Betfair in particular, a wholly inaccurate picture.”
But at the Court of Appeal, Mr Kulkarni argued that the judge had been wrong in his finding about Betfair’s knowledge of Mr Gibson’s gambling problem.
“The judge ought to have found that Betfair knew or ought to have known that Mr Gibson was likely to be a problem gambler throughout the material time of the claim and his finding otherwise was plainly wrong,” he said.
“Mr Gibson placed at least 20,000 individual bets in the six years prior to 22 January 2021, which is more than five per day,” he continued.
“The judge ought to have gone on to find that where a person appears likely to be gambling prolifically despite facing heavy losses, using money which appears likely to be at least in part from selling his business assets or loaning money against them, that person is likely to be a problem gambler.”
He said the judge was wrong in failing to find that it was a minimum requirement of Betfair’s licence to “refuse service to a customer who appeared likely, on the basis of all relevant sources of information, to be a problem gambler”.
The judge was also wrong to find that, in allocating him a VIP relationship manager, Betfair had “not assumed a responsibility to take reasonable care to prevent Mr Gibson from suffering economic loss”.
“Betfair assumed a responsibility to take reasonable care that its facilitation of his gambling did not cause him financial harm by reason of his being a problem gambler,” he argued.
“The judge ought to have held that because Mr Gibson had been allocated to a VIP relationship manager whose role was to interact with him to maintain or increase his betting, knew he was likely to be a problem gambler, and had exploited his betting habits to extend bonuses and offers likely to induce further betting, Betfair assumed a responsibility to take reasonable care that its facilitation of his gambling did not cause him financial harm by reason of his being a problem gambler.”
Betfair – listed in the claim as TSE Malta LP – is opposing the appeal application before three top judges, High Court chancellor Sir Julian Flaux, Lord Justice Popplewell and Lord Justice Birss.
Its lawyers are arguing that Judge Bird’s decision was correct and are urging the Court of Appeal to uphold it.
For Betfair, Jonathan Davies-Jones KC told the judges that the company had “applied appropriate policies and procedures” to meet obligations under its licence.
And he urged them to conclude that the lower judge was entitled to find that the company had no knowledge about Mr Gibson’s betting problem at the time.
“On the facts, the judge was right – and clearly entitled – to conclude that Betfair had neither actual or constructive knowledge of Mr Gibson’s moderate gambling disorder and/or Mr Gibson’s ‘gambling problem’,” he said.
“In light of the repeated assurances from Mr Gibson that he was both wealthy and in control of his gambling, and the contemporaneous documents that Mr Gibson provided to Betfair, the factual premise of the alleged duty of care – that Betfair had actual or constructive knowledge of Mr Gibson’s gambling problem – failed.”
“In any event, even if Betfair did have actual or constructive knowledge that Mr Gibson was a ‘problem gambler’, as a matter of law that would not be sufficient to give rise to a duty of care to prevent Mr Gibson from suffering pure economic loss.
“Further, even if Betfair had owed Mr Gibson a duty of care, and even if it had breached that duty of care, there was compelling evidence before the court that Mr Gibson would have – and, in fact, did – gamble substantial sums on other betting platforms.”
Mr Gibson’s claim would therefore also have failed on “causation”.
The judgment is expected to be reserved until a later date.
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