UK LEGAL
information was restricted until publicly announced.
by an individual or individuals as a result of their role in connection with an event and which is not in the public domain’ is likely to be applied during the Commission’s investigations into general election betting. As an initial point, the Commission will need to establish whether information about the election date was ‘known’ by the individuals concerned, or if they were merely making an educated guess or responding to vague rumours circulating in Downing Street. Placing bets in response to rumours may still be a disciplinary issue within the Conservative party, but is unlikely to amount of a misuse of inside information and/or breach of Section 42 in the Commission’s eyes.
The regulator’s policy paper gives further guidance on when it considers that inside information has been misused, providing a spectrum of circumstances. Again, this focus on sporting events, but there are some general principles which the Commission is likely to apply to the current circumstances. At the lowest level, referred to as ‘by chance (uninformed)’, the Commission considers it has no role to play. This level covers information received by chance, where the person could not reasonably have known the information was restricted. An example is given of someone ‘working in a hospital where a player is being treated for an injury which has not yet been made public’. It seems and making use of information about the election date would fall into this category, as
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At the next level, referred to as ‘by chance (informed)’, are situations where the Commission would have some concerns as inside information has been used, but would consider educational and disruptive steps to be appropriate, rather than more formal action. An example given is ‘a sports club employee overhearing a conversation between two senior employees, on club premises and where the individual is aware that the information is not in the public domain’. A key difference between this and the previous level of inside information is that, here, the information is gained at the sports club premises. This level might reasonably be applied to someone working at Downing Street in a non-Governmental role, for example a cleaner or catering staff, who by chance heard a conversation about the election date. It seems less likely that a have gained such information ‘by chance’, but this will need to be considered carefully by the Commission in its investigation. The policy paper then moves onto circumstances which are potentially a misuse of inside information. This starts with the use of information gained as part of someone’s role, or a close association with an individual, of the club manager leaving his position who uses or passes on this information to a third party for betting purposes’. In these circumstances, the Commission ‘would have concerns’ and may take action to void the bet. This may be the level found most akin to the circumstances of the general election betting, inside knowledge of the election date and used that for betting purposes.
Finally, there are circumstances which the Commission considers may amount to a criminal offence. We need to bear in mind at this point that the descriptions provided by the Commission are in the context of sporting
manipulation of sporting events and cover those noticing and taking advantage of such manipulation as well as those actually masterminding or conducting the event example circumstances to the general election betting scenario, as there is no suggestion that the date of the election was manipulated. It is worth noting that the Commission does not categorise the misuse of inside information, without any event manipulation, as a criminal offence. This gives some insight into the likely outcome of its investigation. ‘In most cases’ the Commission thinks the appropriate sanction for misuse of inside information would be through the Sports body or employer – in this case this would likely mean the Commission reporting to the Conservative party any conclusion that there was misuse of inside information, resulting in the removal of individuals from their roles and the party. Nevertheless, it remains possible the Commission will decide that a prosecution this case, and/or because it wants to set a legal precedent that misuse of inside information does constitute the offence of cheating at gambling.
When it comes to implications for betting operators who accepted such bets, their main concern will be whether they complied with their obligations under Licence Condition 15.1.2 to report suspicions of betting offences. If a betting operator has information which they suspect may relate to an offence or may lead the Commission to consider making an order to void a bet, they must report that to the regulator as soon as reasonably practicable. It is possible that some betting operators who accepted the relevant bets were not aware that their customers were Government officials, as only operators holding a casino operating licence are subject to the requirement in the Money Laundering Regulations to conduct enhanced due diligence on PEPs. In light of this case, any betting operators who are not currently conducting such checks might consider adopting them as good practice.
Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas.
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