People with connections to UK Prime Minister Rishi Sunak are being investigated by the Gambling Commission, reportedly over allegations they placed bets on an election being called on July 4, shortly before it became public knowledge.
Sunak’s former parliamentary private secretary and Conservative candidate for Montgomeryshire and Glyndŵr, Craig Williams has admitted to betting on the election, saying: “I put a flutter on the general election some weeks ago. This has resulted in some routine inquiries and I confirm I will fully cooperate with these.”
Fellow candidate Laura Saunders – the wife of the Conservative party’s campaign director, who is also reportedly under investigation – has said she is cooperating with the investigation.
Suspicious betting activity is most often connected with sports results. In the UK, allegations about that kind of activity are handled via the Gambling Commission’s Sports Betting Intelligence Unit.
That unit has focused mostly on match fixing in sports betting. It works closely with sports governing bodies, which – in the UK and elsewhere – have sometimes taken disciplinary action against athletes when allegations of cheating have been upheld. Bans have been imposed in sports ranging from snooker to handball.
In such investigations of cheating, evidence has included unusual patterns of betting for that person (such as much higher bets than normal), or a cluster of new accounts being opened to bet on an unusual event. Evidence has also been gathered about contact between individuals who are suspected of colluding in cheating – such as phone records and social media posts.
The commission has long recognised that bets also can be placed on political markets. When asked about the allegations during his recent appearance Sunak said he was “incredibly angry” to hear about the allegation. “It’s a really serious matter. If anyone is found to have broken the rules, not only should they face the full consequences of the law, I will make sure that they are booted out of the Conservative party.”
Due diligence
Under the 2005 Gambling Act (section 42) it is a criminal offence to cheat at gambling or do anything for the purpose of enabling or assisting another person in doing so. The maximum penalty is up to two years in prison.
All betting companies licensed by the UK’s Gambling Commission are required to report suspected offences.
Licensed operators are also required to carry out enhanced due diligence on the gambling of “politically exposed persons” or anyone related to or closely associated with them. This would include anyone who works closely with them.
The commission can investigate any allegations relating to misuse of “inside information” in bets on all kinds of events, including the date of an election.
These are bets made with information that you couldn’t find in the public domain – including information you would only have as a result of working, in some capacity, in connection with the event in question. For example, you might know the winner of a TV competition you have been working on in a production role. You might also know that an election is going to be held on a particular date before the prime minister announces it.
After investigation, the commission has the power (according to section 336 of the Gambling Act 2005) to void bets accepted by licensed operators that involve misuse of inside information.
The commission can prosecute people for cheating, although it expressly commits to doing so very rarely. Instead, when cheating – a criminal offence – is alleged, it prefers to work with the Crown Prosecution Service (or its Scottish equivalent) and the police to bring a prosecution. It also works closely with sports governing bodies, which have their own processes for handling allegations and which can impose other penalties, such as banning athletes for cheating.
Burden of proof
Not everyone agrees on what the standard of proof is for showing that someone has cheated. After all, you can bet on a huge range of activities – from corner kicks to what colour hat an elderly monarch might wear.
It follows that a somewhat flexible definition is required. As one UK Supreme Court justice once put it (in opining on the case of a professional gambler suing a casino over winnings at punto banco baccarat): “Plainly, what is cheating in one form of game may be legitimate competition in another.”
The evidence required to show cheating also varies depending on the consequence. The standard of proof needed to void a bet is obviously going to be lower than that required for proceeding with a criminal investigation.
The above mentioned 2017 Supreme Court case on cheating at baccarat is instructive here. The plaintiff was a gambler who had used edge sorting (a type of card counting) to win the game. He said this wasn’t cheating. It was, to use his terms, deploying “a perfectly legitimate advantage”.
The court judged that he had, in fact, cheated, and that the casino could withhold the £7.7m he’d won. In his ruling, Lord Hughes held that the “essentials” of cheating were to “normally involve a deliberate (and not an accidental) act designed to gain an advantage in the play which is objectively improper, given the nature, parameters and rules (formal or informal) of the game under examination”.
Prior to that case, in deciding whether an act is “dishonest” (as a key test of fraud), judges directed juries to first ask whether the conduct complained of was dishonest by the objective standards of ordinary honest people. If the jury decided it was, the judge would ask whether the defendant must have realised that ordinary honest people would think the behaviour dishonest.
In the baccarat case, the court firmly challenged that second test. As Lord Hughes put it, the court found that the gambler had, “contrary to his own opinion”, cheated. He had been dishonest.
This case matters. It suggests that misusing inside information to deliberately gain an objectively improper advantage when gambling constitutes cheating, regardless of whether the person engaging in the conduct thought they were being dishonest.