All bets are off: How BetBright's failure to honour its bets might change the industry

One of the biggest cardinal sins a bookmaker could ever commit is refusing to honour a bet. In gambling parlance, it’s to “welch” on an agreement struck with the punter when he or she hands over their cash and backs a selection. So when online operator BetBright abruptly closed up shop and voided all ante-post bets it inevitably sparked uproar within the betting community and heaped yet more negative publicity upon an industry with a less-than-squeaky-clean image right now.

The debacle arose after 888 acquired BetBright’s technology platform at the beginning of March for £15m. Soon after, it was revealed the Irish firm had pulled the plug on the business and would not be honouring outstanding bets. Instead, customers holding ante-post tickets were refunded their stakes and instructed to withdraw balances. As a side note, BetBright’s demise was likely down to the operator having been a victim of UK and Irish tax rises, as well as underlying market slowdown, according to Regulus Partners.

Enraged customers were met by a cold shoulder from 888 as the London-listed operator insisted it had solely purchased BetBright’s technology platform and not its customers. Therefore, the customers, debts and, crucially here, bet liabilities were not its responsibility. However, amid mounting outcry on social media and intense scrutiny, 888 said that as a “gesture of goodwill” BetBright customers’ ante-post bets for the upcoming Cheltenham Festival would be honoured. All other live bets, such as those riding on season-long football markets, were still voided.

“If you had taken a position at 10/1 to see the odds shorten to, say, 6/1 you would feel let down, of course you would,” says Warwick Bartlett, chief executive of industry consultancy GBGC. “Ante-post bets are a current liability in the accounts, and they should be honoured and taken into account on the liquidation of the company. They are not a liability for 888; they acquired the software, not the shares. The liability rests with the BetBright shareholders.”

Horsing around

BetBright’s most high-profile shareholder was executive chairman Rich Ricci, who took up the role in 2016. When quizzed by Racing TV at the Cheltenham Festival about BetBright voiding ante-post bets, the ex-banker and prominent racehorse owner sidestepped the issue by stressing it was a “difficult situation” and that the business had been “financially challenged”. Unsurprisingly, this hollow explanation did little to placate those venting their fury on Twitter towards Ricci and the defunct operator.

By now, all eyes were on the UK’s Gambling Commission (GC) to see what it would do after announcing an enquiry into the matter. “Fix this @GamRegGB or your entire existence is rendered pointless,” tweeted professional gambler and Coral’s former head of football trading, Nick Goff. In the end, though, the regulator released a statement in which it said it was content with BetBright’s actions and that cancelling ante-post bets was the “best option” for the operator.

The GC also revealed how during its enquiries BetBright “highlighted the very real possibility of going into insolvent liquidation if it remained open”. Yet if the business was close to being insolvent, some pointed to the key asset – its technology platform – fetching £15m. Others questioned whether the GC’s conclusion could be interpreted that customer debts aren’t as important as corporate debts when an operator goes to the wall.

Brian Chappell, an advocate for gamblers’ rights who runs campaign website Justice For Punters, says: “When gambling companies have gone bankrupt in the past the punter hasn’t been paid despite the perception that regulation demands a financial safety net, so some may argue, as the Gambling Commission appears to be doing, that BetBright and 888’s actions are acceptable. However, two wrongs don’t make a right. BetBright and 888 appear to have found a creative legal way of breaking one of the oldest unwritten rules in betting – to welch on bets.”

Tailed off 

First launched in 2012 and running on its own proprietary platform, BetBright ultimately struggled to gain any meaningful headway in the market, particularly the crowded and mature UK sector. Indeed, Ricci told Racing TV during the same interview that the operator had less than a 1% share of a “tough market” before it went under. If that’s the case, it’s hard to imagine BetBright would have had anything near the ante-post bets on the books compared to its larger rivals.

There are unconfirmed rumours that it would have cost BetBright £1m to cover all its liabilities, while The Guardian reported how one customer shared with the newspaper two ante-post football bets placed by that individual last year. The first was a £100 each-way double on Luton Town to win League One at 14/1. and Lincoln City to finish top of League Two at 10/1. That would pay just over £18,000. With just a handful of matches remaining, Luton and Lincoln are currently clear of their rivals by five and four points respectively.

The other bet – a £25 each-way Trixie (three doubles and a treble) on Leeds United, Lincoln and Arbroath winning their divisions – has a potential pay-out of £8,674. Arbroath has Scotland’s League One practically sewn up and Leeds currently lies third in the Championship. The punter told The Guardian he intends to launch legal action against BetBright’s owner, Dublin-registered Dedsert (Ireland) Ltd.

On reflection, Chappell suggests the way this whole situation has played out sets a dangerous precedent: “If the Gambling Commission doesn’t swiftly bring in new rules, what BetBright has done means that a gambling company can sell off any part of their business and then claim, despite being solvent, that they don’t have to honour bets. This is a very dangerous precedent, which is potentially damaging to all parties. Why would any customer place a longer-term bet ever again when all trust has gone?”

For Bartlett, the GC’s failure to mediate a positive outcome for BetBright customers should be a cause for concern: “Let’s be frank,” he says, “the GC is more concerned about addictive play rather than the punter receiving poor customer service, or non-payment. What the GC should have done was immediately taken up the issue with the BetBright board to ensure punters’ bets stood. They could have been the honest broker between themselves, BetBright and another bookmaker who could have taken over the liability.”

Cash on the hip

As for BetBright’s directors, most agree they should have set aside sufficient funds to cover ante-post liabilities when the business folded, regardless of corporate debts (the Irish Times recently reported Dedsert Ireland owed creditors almost €22m and had €3.6m in assets at the end of 2017). Failing that, one compromise could have been to offer cash-out amounts on open positions. In the case of the aforementioned football bets it’s not the ideal solution but it’s better than stakes being handed back.

Instead, affected customers feel they have been stiffed and the industry’s reputation has taken yet another hit. It’s a situation that is “unlikely to do any great favour in restoring public trust in the betting industry”, suggests David Clifton, co-founder of Clifton Davies Consultancy. Meanwhile, 888, which also acquired BetBright’s trading team based out of its Dublin office, is still holding firm. CEO Itai Pazner reiterated to sister magazine EGR Intel on 12 March that 888 “didn’t buy the customers”. “We don’t even have access to them, so it’s a tricky situation.” He added that his company “acted in the best way we could”.

BetBright isn’t the first online bookmaker to pull down the shutters and leave customers feeling cheated (fly-by-night firm 666Bet being a recent example) and it probably won’t be the last. Yet what this unfortunate episode could do is make gamblers more wary of trusting smaller and newer brands to handle their funds and honour bets. While BetBright only cornered a sliver of the market, the common view is that the regulator needs to bare its teeth and ensure this kind of dubious behaviour in which bookmakers wriggle out of their obligations cannot be allowed to be repeated.