Hard line on novelty markets after SunBets ‘piegate’ investigation

Marketing departments across the industry will be on full alert after the Gambling Commission announced that it would deal ‘more severely’ with any novelty betting markets which do not maintain the standards required.

Tabcorp UK, which runs the SunBets operation on behalf of News International, has now had conditions around novelty betting attached to its gambling licence and been told to pay £84,000 to socially responsible causes after an investigation by the regulator into a number of matters.

Tabcorp UK failed to properly risk assess two novelty betting markets offered in relation to an FA Cup tie between Sutton United v Arsenal on 20 February 2017. Had it done so, Tabcorp UK accepts those markets would not have been offered. One of the markets was dependent on a football player eating a pie during the match and the other was dependent on a streaker running across the pitch.

Richard Watson, Gambling Commission programme director, said: “Novelty betting markets, such as the market Tabcorp UK offered on last year’s FA Cup tie between Sutton United v Arsenal, may seem like a bit of fun but the consequences were serious – with the potential to encourage someone to commit a criminal act or breach a sports governing bodies’ rules.”

Tabcorp UK has accepted that it should not have placed reliance on the eating of the pie being broadcast live on the BBC as being sufficient to fully manage the potential integrity risks involved. It also accepts that had a proper risk assessment been carried out at the time, it would not have offered the market.

It also accepts that it was inappropriate, and at odds with the licensing objective to keep crime out of gambling, to offer markets on an event which would involve the commission of a criminal offence. It also accepts that the risk of the streaker market inducing or appearing to induce criminal conduct should have been recognised by an internal risk assessment process and, as a result, the market should not have been offered.

The Commission has now made a statement underlying the seriousness of the matter: “Betting operators licensed in June 2016 were all warned about the risks of novelty markets. We will deal more severely with any operator who disregards the guidance outlined in that document and this report.

“Operators offering novelty markets must demonstrate a robust management of the associated risks in order to ensure they uphold the licensing objectives. It is not acceptable to offer novelty markets which could induce a criminal offence, a breach of a sports governing body’s rules, or which give rise to unacceptable risks to betting integrity.”

The Commission has also added these specific conditions to Tabcorp UK’s licence:

a) The Licensee shall ensure that all “novelty” betting markets (“novelty” does not include any standard occurrence during a sporting event) are appropriately risk assessed, and are only created and approved in line with the Licensee’s written novelty markets procedure. Such procedure shall ensure that improper “novelty” betting markets are not offered, and that an audit trail identifies a named individual who takes responsibility for the approval of each such market.

b) The following betting markets will not be offered by the operator:

i. Novelty markets which are dependent on an event which would be a breach of the relevant sports governing body’s current and publicly accessible rules; or

ii. Any markets which are dependent on an event which would involve the commission of a criminal offence.

Given that the event happened 14 months ago, there will be question marks around the Gambling Commission’s expediency on the matter. However it’s investigation was more multi-layered than previously thought, with Tabcorp highlight a number of other issues around self-exclusion and risk management.

Between November 2016 and May 2017 Tabcorp UK received 12 complaints from self-excluded customers that they had been able to circumvent self-exclusion arrangements. In May 2017 Tabcorp UK performed a review of the system and notified us of the issue through key event reporting. Its investigation revealed that between August 2016 and May 2017, 118 self-excluded customers had opened a further 141 duplicate accounts.

It then refunded deposits on 127 accounts, totalling £24,174.97 and €50. Of the remaining 14 accounts, withdrawals exceeded deposits.

Watson added: “Vulnerable customers were able to gamble with Tabcorp UK, despite choosing to self-exclude. This is not acceptable. Gambling firms must ensure the systems they have in place are protecting their customers effectively.”

The company also admitted that some staff members took bets ahead of the 2017 Cheltenham Festival ar a promotional event, despite the company not having a licence to do so. Tabcorp UK accepts that it failed to sufficiently manage the risks of staff at the event offering facilities which its licence did not cover and, had it done so, additional staff training and supervision would have been provided.

Immediately following the event, Tabcorp UK took action to prevent recurrence by putting in place measures to ensure that a member of the compliance team attends all similar events in the future, and is accountable for ensuring that all relevant staff are appropriately trained and supervised.

As part of the settlement with the regulator, for the self-exclusion breach – Tabcorp UK has paid £50,000 payment in lieu of a financial penalty to charities for socially responsible purposes. This is in addition to the £24,174 already returned to affected customers. It has also paid £10,000 towards the Commission’s investigation costs.

In determining the appropriate outcome, the Commission said it took the following factors into account:

  • Timely self-reporting of issues
  • Thorough internal investigation which was fully reported upon to the Commission
  • Proactive action to address failings and weaknesses
  • Proactively refunding £24,000 to affected customers, rather than awaiting regulatory action
  • Admissions made.