July 5, 2018

The Gambling Commission has today issued guidance on the application of Rule 4 for operators.

Rule 4 is a general rule of betting which relates to the reduction of winnings a punter receives when a horse they have backed wins. These deductions occur when a horse withdraws from the race creating a scenario whereby it becomes easier for other horses to win the race.  In order to combat this, an amount of money is deducted from the winnings in order to balance the effect of the horse that withdrew from the race.

There have been complaints made from punters who have claimed that operators have shortened the odds of known or likely non-runners in order to maximise Rule 4 deductions for their own commercial gain.

In order to prevent these complaints from happening in the future, the Gambling Commission has set out four questions that operators should ask themselves when applying Rule 4.  These are:

1. Do you have robust company policies that deal with sports betting integrity and misuse of inside information requirements?

Operators should ensure that their policies are reviewed and updated on a regular basis and contain adequate detail with regards to Rule 4 compliance.  Operators should make sure that these policies are in line with the requirements set out in the Licence Conditions and Codes of Practice (“LCCP”).

2. Are all employees working within the trading team trained in this area?

Operators should ensure that employees receive regular training and are aware of the implications of non-compliance, both to themselves and the business. Employee training records should be kept up to date and reviewed regularly.

3. Do you monitor and audit the activity of your trading team to ensure any breach of policy is identified and promptly escalated to the Gambling Commission’s Sports Betting Intelligence Unit and, where appropriate, the relevant sport’s governing body?

Operators should make sure that this process is clearly managed and works effectively.

4. Are your rules in relation to Rule 4 accessible and written in plain and clear language?

Operators should make sure that their rules are easily accessible to their punters.  Their reputation is built on trust and difficult rules to understand could result in loss of trust from a punter as a result of their perceived unfair treatment.