A billionaire “problem gambler” who lost almost £1.5 million on football bets has sued Betfair for his money back in a landmark case, claiming it had a duty to protect him.
Property tycoon Lee Gibson told the court he placed more than 30,000 personal bets through betting exchange Betfair during a high gambling period between 2009 and 2019.
He said it was “fascinating and exciting” at first, but his losses became “unsustainable” and his account was suspended for good in March 2019.
Mr Gibson, 47, from Leeds, is suing Betfair, the world’s largest betting exchange, claiming it should have known he was a “problem gambler” and had a duty to stop him sooner.
The case was dismissed by a High Court judge last year, but his bid for damages worth around £1 million will now be heard by three of the Court of Appeal’s top judges and will be heard this week.
Lawyers say the case could have a major impact on the online betting industry because it clarifies what obligations online betting companies owe to gamblers.
His barrister, Yash Kulkarni KC, said Gibson’s betting focused on the tricky “correct score” football market, sometimes placing bets of up to £20,000 on “obscure” games.
He said the judge should have found Betfair “knew or should have known” that Mr Gibson was a “problem gambler” and had a duty of care to him appropriately because it treated him as a VIP with a personal “relationship manager”.
“The evidence suggests that Betfair knew or had information showing that Mr Gibson was chasing his losses, borrowing money or selling items to gamble, and gambling beyond what his income could cover after taxes and expenses,” he said.
The court heard that despite leaving school at 16, Mr Gibson became a billionaire by buying and renovating properties in the Leeds area.
His portfolio included 16 of the tallest homes, which were rented out to students, but some were later sold or remortgaged as losses mounted.
He started gambling (mainly football) using the Betfair exchange in 2009, and although his account was occasionally credited, he lost £100,000 by the end of 2012.
His losses rose to £500,000 by the end of 2015, £1m by January 2018, and by the time Betfair suspended his account in March 2019, his losses had reached almost £1.5m.
They were treated as VIP customers and received incentives such as entertainment at soccer games and invitations to golf, but as time passed, the incentives decreased.
When questioned under anti-money laundering regulations about the source of the gambling funds, Mr Gibson explained to Betfair that he was a landlord with a significant portfolio of properties.
Betfair eventually removed Mr Gibson as a customer in 2019, but he continued to sue, claiming he “knew or should have known” about his problems and should have stopped sooner.
By treating him as a VIP client with a personal manager, the company also assumed a responsibility to look after him, which it failed to meet, his lawyers argued.
He claimed damages for money he lost gambling over six years, totaling around £1m, before bringing the court action in 2021.
At the end of the case’s trial last year, Judge Nigel Bird said he was not sure Betfair should have known about his gambling problem because it tried to hide it.
“Mr Gibson consistently and frequently assured Betfair that he could finance the gambling, including his own losses, and none of the information he provided to Betfair painted a different picture,” he said.
“The fact that he has consistently implemented anti-money laundering checks makes it impossible for Mr Gibson to argue that the scale of his losses was sufficient to give rise to reasonable concern on its own.
“In fact, even after the trial, there is no real suggestion that Mr. Gibson could not afford to gamble.
“He could afford to finance his gambling, at least based on the information he provided to Betfair. He misled Betfair about his gambling and it is very difficult to identify dishonest problem gamblers.
“In my view, Mr Gibson did not simply fail to share information about his gambling problem, he actively took steps to conceal it and present a completely inaccurate picture to the world, and in particular to Betfair.”
But at the Court of Appeal, Mr Kulkarni argued the judge was wrong in his finding about Betfair’s knowledge of Mr Gibson’s gambling problem.
“The judge should have found that Betfair knew, or should have known, that Mr Gibson was likely to have been a problem gambler throughout the period of the claim, and that otherwise his finding was clearly wrong,” he said.
“Mr Gibson placed at least 20,000 individual bets over the six years prior to January 22, 2021, which is more than five per day,” he continued.
“The judge should have found that if a person appears to be gambling a lot, at least in part using money that appears to have been from selling business assets or lending money, despite incurring large losses, that person is likely to be a problem gambler.”
He said the judge was wrong in failing to find that “refusing service to customers who appear likely to be problem gamblers based on all relevant sources of information” was a minimum requirement of the Betfair license.
The judge was also wrong to find that in assigning him as VIP relationship manager, Betfair “failed to assume a responsibility to take reasonable care to ensure that Mr Gibson suffered no financial loss”.
“Betfair has a responsibility to take reasonable care to ensure that its promotion of gambling does not cause financial harm to those who are problem gamblers,” he argued.
“The judge found that Mr Gibson had been assigned a VIP relationship manager whose role was to maintain or increase his betting, and that, knowing that he was likely a problem gambler, they had exploited his betting habits to extend offers and bonuses that could entice him to place additional bets, and Betfair had therefore found him to be a problem due to his encouragement of gambling. It should have ruled that he was responsible for taking reasonable care to avoid harm. Gambler.”
Betfair, listed on the bill 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.
Lawyers argue that Judge Byrd’s decision was correct and are urging the appeals court to uphold it.
In Betfair’s case, Jonathan Davies-Jones KC told the judges the company had “applied appropriate policies and procedures” to fulfill its obligations under the licence.
And he urged them to conclude that the lower judge was entitled to find that the company had no knowledge of Mr Gibson’s betting problems at the time.
“In fact, the judge was entitled, and certainly entitled, to conclude that Betfair had no actual or constructive knowledge of Mr Gibson’s moderate gambling disorder and/or Mr Gibson’s ‘gambling problem’,” he said.
“In light of Mr. Gibson’s repeated assurances that he was wealthy and in control of his gambling, and the contemporaneous documents Mr. Gibson provided to Betfair, the factual premise for 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 had actual or constructive knowledge that Mr Gibson was a ‘problem gambler’, in legal terms this would not be sufficient to give rise to a duty of care to avoid Mr Gibson suffering pure economic loss.
“Furthermore, even if Betfair owed a duty of care to Mr Gibson and breached that duty of care, there was compelling evidence before the court that Mr Gibson would have gambled significant sums of money on other betting platforms.”
Mr Gibson’s argument would therefore also fail on the “causation” level.
Judgment is expected to be reserved until a later date.
