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The need to protect against disputes with customers - Thursday 16th October 2008

What protection does the law give operators and punters in the event of a dispute? Sarah Cooper and David Clifton of law firm Joelson Wilson look at how things have changed under the Gambling Act.

Last year, independent adjudicator IBAS received 2,067 requests to adjudicate in the resolution of disputes between punters and bookmakers. The disputes included the usual suspects, ranging from ambiguous instructions being given by the punter, to late bets, to prices laid in error. Did you catch the article in the paper recently about the punter who went to collect his winnings at the bookmakers only to find they had already been collected by someone who had filled out a 'lost ticket' form? So, what is the correct procedure for operators to follow in dealing with dissatisfied customers?

The first port of call for a disgruntled punter is the betting shop where he placed his bet and, accordingly, all operators are required to have their own complaints procedures in place. If a punter goes straight to IBAS or the Gambling Commission, their policy is to refuse to deal with him until he has tried to resolve the issue with the betting shop first. Operators are required to inform customers that, if the issue can't be resolved through the in-house complaints procedure, they can refer the dispute to a third party independent adjudicator, such as IBAS< who should be approached next. IBAS manages to resolve most disputes (the vast majority of which involve football and horseracing) within five weeks.

A third party adjudicator's decision is usually, but not always, binding and its decision is likely to be the end of the matter. If a punter is still dissatisfied, he can approach the Gambling Commission, although it is unlikely that the Commission will intervene unless the operator is clearly in breach of his obligations. Additionally, the Commission may take action if the operator appears not to have a complaints procedure, if his rules don't cover all the matters they should, or if he doesn't refer a punter to an independent adjudicator.

The Gambling Act 2006 has now made gambling contracts enforceable and so the contract made between an operator and a punter, when money is paid in return for the punter's chance to win, is as valid a contract as any other and either party has the right to enforce that contract or to be compensated if the other party breaches its terms. In practice, this means that operators may have to pay out if a cashier makes an error, although this may not be the case where the operator's own terms state that they are allowed to correct any such errors. There has been no test case as yet to make the effects of the new provision on the enforceability of gambling contracts known.

Is there anything that operators can do to protect themselves against claims? The most important step would be to ensure that an operator is fully compliant with its own rules as any external adjudicator will certainly take this into account and is likely to make its decision according to the operator's rules. Operators are now obliged to have a complete set of rules covering the placing of bets which must be clearly displayed and which must give prominence to the position surrounding late bets, voiding and maximum payouts.

Careful drafting is crucial to avoid ambiguous interpretation of any rules. If there is scope for a punter to innocently interpret the rules differently from the way in which an operator intends them to be read, then the drafting of the rules should be tightened up to reduce or, preferably, eliminate that risk. Retaining evidence of bets, whether or not it seems at the time that they may be controversial, could be valuable when it comes to settling disputes. Of course, there are certain conventions which will continue to protect the operator, as long as nothing to the contrary is stated in the rules. For example, a bookmaker will not, as a matter of course, check a betting slip to ensure it accords with a punter's intentions and the onus is on the punter to ensure that the slip is legible and that it conveys his intentions. However, if the slip would be reasonably clear to a third party, any adjudicator is likely to rule that the punter's bet should be paid out.

So, operators should be aware that the Gambling Act 2005 has affected disputes in two main ways - by making gambling contracts enforceable and by imposing a requirement for a complaints procedure.

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