Why Paddy Power Betfair’s share price drop is good news for believers

The reason I haven’t written my blog for more than a year is that I was trying to put plenty of distance between my last post about gambling and returning to the fold on other subjects, so it might seem perverse that I am back writing about a gambling company. But you know what they say: you can take the man out of Betfair, but…

So I thought I would just briefly pen some thoughts on the dramatic collapse in the PPB share price last week. I know that whenever I write about that subject, some people accuse me of talking my own book, and I stress, as always, that this is just my view. I barely know a soul at the company any more, and I have no great insight, so ignore it or treat it with scepticism if you want. (Although I notice, for what it’s worth, that the people who responded to my previous posts on why Betfair shares were a buy by adding a load of vitriol to either my Twitter feed or my blog post have conveniently deleted what they wrote. Apparently my suggestion last time they fell 10% that it represented a good buying opportunity wasn’t quite so daft after all.)

Anyway… The shares, which have a high since the merger of £107, closed on Friday night at £83.75, down from £96.90 at the start of the week. The reasons for this seemed unclear to me, so I have done a bit of digging around to try to find out what is going on, and what I’ve found suggests to me that the price movement is bordering on absurd. That is not to make any judgement on the absolute value of the shares as such; rather, it is to talk in relative terms: if they were right at £96 at the start of the week, then they were wrong at £83 by the end of it.

Two things happened last week to cause the price fall. The first was a research note from Credit Suisse that questioned the value proposition of the merger and suggested that scale isn’t everything. It’s a point of view, I suppose, but it seems a very odd time to be expressing it, and it is based, from what I can see, on the fact that SkyBet doesn’t have scale and SkyBet is doing particularly well thank you very much. What is fails to mention is that SkyBet is clearly in an exceptional position: they have outstanding brand recognition; they are punching the lights on out execution (and good on them for that); and they have benefitted from links to what was their parent company.

You might not buy my counter-case. You might also not share my view that it is a fundamentally flawed approach to look at the top three companies in the market and make a judgment on the value of scale, because doing so assumes that they work in harmony with each other when it is abundantly clear that they don’t. Even if you were in that camp, I’d be fascinated to hear your reasons for thinking that such a piece of research justifies the stock falling to 3% below where even this bear case maintains it should be. In short, if the Credit Suisse note is the reason for the sell-off, it looks significantly overdone.

It seems, though, that there is another reason, which I think is worth further analysis. That reason is a concern among some about the potential impact of the EU’s 4th Anti-Money Laundering Directive, and specifically, comments that I gather were made about it last week at an investor breakfast hosted by the analyst at Investec. By SkyBet, as it happens.

The comments in question were that SkyBet had trialled the part in the directive about getting the appropriate documentation from customers who were betting more than €2000 – a trial that, I gather, led to a drop in revenues of 5%. I don’t know the full details, but I gather that they went on to say that if that was the impact on them, then the impact on PPB would be greater. And everyone, it seems, panicked.

Now, I’m a long time out of this game, and it may be that PPB’s AML processes have weakened considerably from the days when PPB was just BET. But I doubt it very much, and suspect, in fact, that the opposite is the case. And given that I know that the 4th AML directive was not a topic of the least concern to the AML team when I was around, I’d be mighty surprised if it suddenly was now – particularly given that it is just about the only team left at PPB which is run by the same person I worked with back in 2010 (which, it probably goes without saying, is at least in part because he is bloody good at what he does). I haven’t talked to him, I should stress, but I do know what he thought then and I would be extremely surprised if he were any the less confident now, even taking into account the fact that the combined company has a High Street presence.

For those short on sleep, I have copied the relevant parts of the 4th AML directive below. The key point you need to know, though, is that unless (as I say) something has changed for the worse, PPB already do all of the requirements in it, demanding verification of source of funds or wealth when customers hit various specific triggers. Equally – again unless a lot has changed (although it would seem to me that if it has, it will be the other way – towards smaller players, not larger ones) – the 4th AMLD would affect a very small percentage of the company’s customer base. Meanwhile, in addition to both those points, it will be entirely up to the Treasury here in the UK as to how they interpret the 4th AMLD, and PPB (should they have any concerns, which I doubt) will at least have discussions about that before anything happens. My previous involvement in those types of discussions mean I find it very hard to believe that the 4th AMLD should be of any real concern.

So the long and the short of all this is that last week the shares fell 15% on the basis of a fairly weak analyst report and some comments from a competitor CEO at a breakfast. The comments in question were him taking a wild guess about another company’s AML procedures on the basis (it seems fair to assume from their trial’s impact) that his own company appears to be playing catch-up, and in my view are entirely without foundation. They also fail to take into account the fact that there will need to be interpretation of the directive by our own government, such that the current format with which PPB already fully complies is as tough as it is going to get. As I said, bordering on the absurd.

All of which you can ignore completely if you wish, or indeed rubbish to your heart’s content. I’m not really bothered. To be absolutely clear, yes, I am still a shareholder in PPB, and so yes, I have an interest in the price being buoyant. But I’m a long-term holder of my remaining stock, so I haven’t written this because of that: I’m writing it because I get asked by people what has happened to the price, and what I think of it. And the answer on this occasion is that having looked into the reasons for it, I think the move makes no sense whatsoever and will be corrected. So if, like me, you believe the absolute story of the business, you will, like me, think that this 15% fall represents a good opportunity to get in.

(And that, honest, is my last post on gambling. But at some point soon, I will come back and write about other stuff. If you give a monkey’s about my views on anything else. Which you probably don’t.)

Article 11 references who and when Customer Due Diligence (CDD) is a requirement. It says:

Member States shall ensure that obliged entities apply customer due diligence measures in the following circumstances:

(d) for providers of gambling services, upon the collection of winnings, the wagering of a stake, or both, when carrying out transactions amounting to EUR 2 000 or more, whether the transaction is carried out in a single operation or in several operations which appear to be linked;

Article 13 references Customer Due Diligence and states:

Customer due diligence measures shall comprise: (a) identifying the customer and verifying the customer’s identity on the basis of documents, data or information obtained from a reliable and independent source.

It goes on to say under sub paragraph (d) that source of funds should be the subject of scrutiny where necessary. It falls under the ongoing monitoring process, and I would imagine is questioned when risk thresholds are met, rather than as a matter of course.

(d) conducting ongoing monitoring of the business relationship including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the obliged entity’s knowledge of the customer, the business and risk profile, including where necessary the source of funds and ensuring that the documents, data or information held are kept up-to-date.

The only reference where this is specifically referenced as mandatory action is under Article 20 which relates to Politically Exposed Persons. Not many of them are big gamblers, to my knowledge. But for what it is worth, here is what it says:

With respect to transactions or business relationships with politically exposed persons, Member States shall, in addition to the customer due diligence measures laid down in Article 13, require obliged entities to: (a) have in place appropriate risk management systems, including risk-based procedures, to determine whether the customer or the beneficial owner of the customer is a politically exposed person; (b) apply the following measures in cases of business relationships with politically exposed persons: (i) obtain senior management approval for establishing or continuing business relationships with such persons; (ii) take adequate measures to establish the source of wealth and source of funds that are involved in business relationships or transactions with such persons; (iii) conduct enhanced, ongoing monitoring of those business relationships.



Europe Debate

I was at a dinner last night with a number of political journalists and, among others, Roland Rudd, who is running the campaign to stay in Europe.

I asked Mr. Rudd the following question:

“It seems to me that one of the arguments to leave that resonates with the public is the idea that Europe is always telling us what to do, and that so much of our legislation originates in Brussels.  It also seems to me that many pieces of European legislation would, had we not been a member of the EU, have been independently introduced here anyway.  For example, it seems inconceivable that the climate change requirements set by Europe would not have been introduced by Ed Miliband when he was energy secretary, and Tony Blair opted in to the Social Chapter not because he had to but because it was the easiest way to implement something he wanted to do anyway.  In short, political elites of left or right introduce things they want when they have power, and most of the things that Conservative Eurosceptics don’t like would have formed part of the legislative programme of a 13-year Labour government had we not been ‘in’.  Why do you not make this point?”

He replied, “I don’t know.  It’s a very good one.  I am going to plagiarise it.”

I’m just posting it here now so that no-one tells me I’m after-timing when he does…

RGT research

I wrote a piece for eGaming Review on the RGT research, which  went into their most recent issue in the form of a shorter interview. I didn’t want to publish it here until the magazine was out, for obvious reasons, so if you wondered why I didn’t write anything on the topic at the time, that’s why. Here is the full piece now though. Happy New Year, by the way.


Following years of the same old discussions around the topic, it is possible that December has at last seen a paradigm shift in the problem gambling debate. Just as this edition of eGR was going to press, the Responsible Gambling Trust published research that analysed more than seven billion interactions between customers and product.  Commissioned from the boffins at Featurespace who specialise in behavioural analytics, its ground-breaking conclusion was that stake sizes are not a relevant indicator for potential issues, and therefore that limiting them is not the silver-bullet solution that some often suggest. The implications of that could be profound.

Given that the research was based on machines found in shops – FOBTs – you might immediately ask what relevance it has to the online gambling sector. Indeed, you might argue that if it has any at all, it is bad news for internet-only operators because the pressure on the Government to introduce a capon stakes is likely to ease. On the face of it, any restrictions on FOBTs should be a boon to internet gaming, which is well-placed to suck up any latent demand; so anything that makes restrictions less likely can hardly be a good thing.

But the oft-repeated truism about FOBTs is that there is limited point in making restrictive rules around what can be done on machines in shops when smartphones allow everyone to carry a host of unrestricted games around in their pocket; and it is because of that, that the research should have everyone in the online industry sitting up and taking note. The reality of FOBTs is that while any stake limit will probably result in a short-term boost for eGaming, the medium-to-long-term prospects are inevitably that restrictive legislation will be carried across. If limiting stakes is seen as a way of protecting the vulnerable in shops, then it will not be long before it is introduced as a protection in cyberspace – a restriction which is no longer difficult to enforce under the new UK licensing requirements. In other words, the RGT research has significant implications for just about anyone reading this magazine.

As with all reports, though, it is what gaming companies do next that will set the landscape. The report’s conclusion that limiting stake sizes across the board is ineffective will doubtless be welcomed across the industry, which will also play down the apparently alarming revelation that 23% of regular gamblers are deemed to have issues with playing. The defence there is simple enough: the number is so much larger than previous ones because it is a percentage of regular players rather than of the overall population.

But while the response from operators is likely to draw on both these facts in the coming weeks, the real prize for them lies in the fact that Featurespace’s research does more than simply improve the diagnosis of the problem. Far from just looking at past data, it also offers a way forward by predicting future behaviour, based on the interactions that it has already observed. That kind of methodology means that the machine it has built will get better and better the more information that is fed into it. It will intelligently design solutions to prevent people from approaching, let along falling into, the problem gambling hole.

This is the really good news for people on both sides of the problem gambling debate. Both sledgehammer solutions – blanket legislation which impacts everyone in order to protect the minority who need it – and unrealistic ones (such as collaboration inter-operator and between them and the banks, mooted on Five Live as I have been typing) have for a long time dominated the political debate.

In response, the industry has really only been able to point at the potential wider collateral impact of introducing such broad solutions, without having a better alternative to offer. But now, for the first time, it can implement something that can make a real difference to the vulnerable without impacting other customers.  It should embrace and invest in the new technology that exists, and apply it across the whole spectrum of its online gaming product, grasping what is perhaps the first real opportunity in a decade to get significantly ahead of the game.




Does the “High Street” case actually stand up?

There have to be better ways to start your day than being woken up by an argument about FOBTs, but such was my fate this morning. No sooner had my alarm clock radio turned on, than I was listening to the Mayor of Newham and the Chairman of the ABB go at each other about shops on the High Street. It was about 6.40am. There should be a law against it, really.

The reason for the argument was that apparently a group of 93 councils is calling on the government to reduce the maximum stakes on FOBTs from £100 to £2. If this sounds like the same debate as I’ve written about before, that’s because it half is – but apparently only half. When Paul Darling, for the ABB, defended his organisation’s position by saying that there was no evidence to show that such a cut would help problem gambling, the Mayor, Sir Robin Wales, countered that it wasn’t problem gambling that concerned him, but the state of the High Street. There are too many bookmaking premises, he claimed; and action is needed to force the closure of some.

What he was never asked, and what I would love to know the answer to, is why he and the other 92 councils think that a cut in stakes will reduce the number of shops – at least to any significant extent.

You might think that’s a silly question. The implication for years has been that a cut in stakes would impact bookie profitability, and all things remaining equal, I suspect that it would. But the thing is that when changes like that come about, all things do not remain equal; and while profitability might be impacted, the shift in its make-up would end up by not, I think, delivering to Sir Robin the result which he and his fellow councillors intend. Why? Because a B3 machine, which has a maximum stake of £2, has almost exactly the same level of profitability per hour as a B2 machine, with a £50 average stake.

Don’t believe me? Well, have a look at the maths. A B3 machine has an 8-10% margin, against a B2 machine’s margin of 2.7%; and a B3 machine can spin every 2.5 seconds, against every 20 seconds for a B2. So the margin is three times as great, and the spin rate eight times as quick.  Combined, that makes the machines 24x more profitable. But the stake is 1/25th. So, basically quits.

What that means is that if you can guarantee the number of hours played – and bear in mind that every debate about FOBTs always seems to assume that a machine is used to its absolute maximum capacity (which is why people talk somewhat absurdly about being able to lose £18,000 in an hour) – then B3 machines are just as profitable as B2s. Perhaps that explains why B3s are the fastest-growing product on the High Street. If a change in B2 stakes led in turn to a levelling of the playing field between how many B3 machines a bookmaker can have relative to an arcade, as seems likely, it seems to me that profits could be re-couped, and the overall number of shops might barely be impacted at all – maybe even maintained in a manner that undermines Sir Robin Wales’s stated cause.

Of course, there may be other reasons why a £2 stake makes sense. The debate around it will, I am sure, come up on Monday, when the Responsible Gambling Trust publishes its much-awaited Featurespace-led research into problem gambling issues, and those on either side of the debate as to whether a reduction in stake would help stop people developing addictions will doubtless be watching closely. But the interesting thing about this morning’s squabble was the way in which Sir Robin was very clear in stating that he had one agenda and one agenda only in calling for a reduction in stakes: that introducing one would impact the number of shops there are on the High Street.

Maybe he’s right, and it will. He certainly seemed very confident of his case. But he was never actually challenged on it, and it would have been interesting to hear his response to the fact that the maths don’t actually support it.  Next time, perhaps.

You ain’t nothing but a Groundhog

I will be intrigued to see what comes out of tonight’s parliamentary reception for the horseracing industry, which I am surprised not to have seen talked about anywhere.

I gather that the evening was initially organised in order to publicise racing’s contribution to the economy, and to launch a community engagement programme called Racing Together. But it is also mooted that the industry may use the appearance of Helen Grant, Clive Efford and Sajid Javid at the event to launch its views on “the best way forward in securing a fair and sustainable funding system” – namely (in their view) the abolition of the levy in favour of a ‘Horserace Betting Authorisation’.

People will doubtless have their own views, and I am not sure I have the capacity to enter into lengthy analysis of my own here. But two quick thoughts come to mind: the first is that it is a terribly grand title for something that has been discussed by racing and sports for years – a betting right – and in my experience, re-brands tend to be all about attempts to make something initially considered unpalatable seem less so than previously.

And second, following on from that, the reality of re-brands almost invariably is that unless something fundamental has been altered, then changing the packaging doesn’t actually achieve a lot.

The concept of “betting rights” has previous set industry against industry: one has argued that it has one, and the other has argued that it doesn’t. It seems to me that changing a name won’t change the fact that this basic disagreement has resulted in the adversarial approach that has set people at loggerheads for a decade or more. As such, it seems (regrettably) unlikely to me that a re-packaging will prove to be the game-changer that it would be nice to see.

I always say to clients that the crucial thing when you want to change the dynamic is to address the fundamentals rather than attempting to repackage the same narrative. You may take the view that Racing’s approach, as set out in the letter below (which found its way to me from the Thoroughbred Breeders’ Association), does that. But in my opinion, you could plausibly date it ‘2004’ and no-one would suggest there had been a typo. Unfortunately, that probably means that in the coming months, observers of this particular slug-fest are in for another round of the same old stuff.

Dear TBA Members,

Re: Showing your support for a better funding mechanism for British Racing

As you will be aware the Government is currently consulting on options to reform or replace the Horserace Betting Levy, an issue of critical importance to the future funding of our industry. The consultation period closes on 5 November and British Racing is making a collective response, jointly submitted by the British Horseracing Authority, Racecourse Association and Horsemen’s Group.

Racing and Breeding’s submission will comprehensively answer both parts of the consultation, looking into reform and replacement respectively, with a preference for the latter. We are suggesting a replacement funding mechanism, called a Horserace Betting Authorisation, whereby Racing authorises all betting services on its product and through which betting firms provide a fair return towards the administration, integrity and future development of the Racing and Breeding industry.

We would like to demonstrate the depth of support across the British Racing and Breeding industry for a more sustainable central funding mechanism and to provide as many grassroots examples as to how this would help your business in practice. I am writing to ask for your help in writing to both the Sports Minister, Helen Grant at the Department for Culture, Media and Sport, and your local MP, in support of the position that British Racing has collectively agreed. This will help to provide important colour and context to the arguments which we are making in our joint submission.

I understand that you are incredibly busy and have therefore taken the liberty of including two template letters, one to the Minister, and one to your local MP, which you may wish to use as the basis for your correspondence. Please do feel free to tailor these letters as you see fit, provided of course that they do not deviate from the industry’s core position – a preference for a new, enforceable funding mechanism.

Click here to download the letter templates

The consultation period closes on 5 November therefore it is important letters are submitted to the Department for Culture Media and Sport ahead of, or around, this date.

If there is any way in which we can be of further assistance to you drafting these letters, or by providing you with more information on Racing’s position on Levy reform and replacement, please do not hesitate to get in touch. The BHA has a team dedicated to helping deliver this project. If you have any questions about Racing’s position, and our proposed new funding mechanism, in the first instance please email levyconsultation@bellpottinger.com or telephoning 020 3772 2632.

Yours sincerely,
British Horseracing Authority

Why Betfair shares are still a buy

Betfair’s share price is up more than 10% in three weeks and 5% in the last two days, following their announcement of Q2 figures on Monday morning that showed 22% year-on-year growth. This much is well known, and plenty of analysts have put out notes in the couple of days since the publication of numbers. I will not, therefore, go into any depth about them: there is plenty of information in the public domain from people who are significantly more knowledgeable about today’s business than I am. I’ve written before about why I think the shares are a buy, since when they are up 50%. But for those who have asked for my view, I have one thought to offer about why I think that they still remain a buy at this level. It comes with the usual caveats: I have no line into the business (indeed, I have not spoken to a single person in the company for months); and I am a shareholder and therefore will be seen by some to be talking my own book. But to be clear: this is not investment advice. It is just my view, for what that’s worth. You could argue it is the reason why I am a shareholder, long after I might have decided it was time to move on.

When people looked at Q2’s 22% revenue growth, a number of analysts were keen to stress that 9% of it was the result of favourable sporting results leading to strong sportsbook margins. The clear implication was that this cannot be expected every quarter, and that therefore investors should really only consider the 13% that remained.

This is a traditional, not to say tried-and-tested, approach which on the face of it makes a lot of sense. Indeed, history supports it with every other bookmaker out there.

But here’s the thing: despite what people say about it having moved its business model and sold out, the reality is that Betfair still isn’t the same as every other bookmaker out there. And despite what people say about liquidity on the exchange being much poorer than it was (and in some places, it is; but in actual fact, as a whole, volumes have tripled in the last three years), the exchange is not dead. And in my view, these two things are very important, at least in relation to the topic at hand.

Sportsbook margins are determined not just by sporting results, but by risk management around those sporting results. And Betfair has, built-in, the best risk-management system that anyone could possibly have. Indeed, by finally linking the sportsbook to the exchange, in the way that was first mooted (but which we failed to deliver) back in 2005, Betfair now have a platform which should allow them to take the best of both worlds, and move the margin north for good.

The downside of the exchange was always that it delivered a low-margin product even to people who were not price sensitive. This is one fundamental reason why other bookmaking operators did not simply move towards an exchange model with its keener pricing, the moment that the technology was available. If 10% of your customers are very price sensitive and 90% are not, then to offer everyone out there a product with a 2-3% commercial margin when you could charge a 10% commercial margin and still be best price simply doesn’t make commercial sense. But this, for years, is what Betfair has done, because the low-margin exchange was the only product it had.

The downside of the sportsbook, in turn, was that, first, it exposes you to risk to the outcome of the event (which leads to you cutting back the bet size of your shrewder punters – or sometimes not even the shrewder ones, but ones on a winning streak), and second that (as a result) it is harder to deliver keener pricing to those who are conscious of the margin on every bet. In short, it is not as easy to engender loyalty in your customers: you piss them off either because you charge them too much or because you won’t stand their size.

A combination of the two genuinely means the best of both worlds. But more importantly, it means that you can manage the risk on your sportsbook, if you so choose, much more effectively. You offer prices based on the due diligence on your customers, like everyone else out there; but if you are asked for a price by someone whose success rate is likely to damage your commercial margin, you can manage the risk of his or her bet without having to knock it back.

The result of this should be obvious: the customer experience is better; the margin on the occasional punter can be maintained at a level which makes better sense. When you add to this clever little gizmos like Price Rush, which I would guess do wonders for both acquisition and retention, the opportunity to become the destination of choice for punters at both ends of the spectrum is dramatically increased.

Back in 2000, when we launched Betfair, a lot of people shared our view that we had built a better machine. In some respects, we were right, because what we created was the best risk-management system out there; but in fact we had only built half of it. For various reasons, we failed to deliver the other half, and the company went through a difficult period. But that second half has now been built, and the whole – it seems to me – is now purring very effectively.

Some will argue that the current price reflects that: it is double what it was at the lows, and many will say that it has run its course. But, far from approaching the highs, it has still not quite gone past the level at which the company came to market – which it did at a time when Paddy Power was worth about a third what it is today – and there is now good reason to believe that the company genuinely can reach the sort of heights in the betting hierarchy to which its 2010 IPO positioning aspired. For all that some people today rubbish its flotation pricing, those that bought the story then did so because they thought Betfair was a lean, mean, fun company that had built a better machine than anyone else’s. There are lots of reasons to believe that today, at an offer price just lower than it was back then, that is exactly what it is.

Why does progressive tax work for people but not countries?

No-one likes to get an unexpected bill. When it’s a big one, and the claimant a hectoring EU, you might argue it is no surprise in the current political environment that toys are being thrown out of every pram in the Westminster crèche.

But if it would be political suicide at this juncture for any leader to raise his hands in reluctant acceptance, the reaction of the public (boosting support for UKIP by 4% on the news) is harder to reconcile with past positions. Isn’t this an electorate that believes by a clear majority that progressive taxation is the way forward?

For years it has been the Government position – and the view of the person in the street – that ‘the broadest shoulders should contribute the most’. ‘Broadest shoulders’ as a phrase is hard to define, but it tends not to include any mitigating circumstances relating to having made good decisions or having put in more time or effort to achieve a goal: it is generally seen as some combination of being the richest, the most successful, and the highest paid. It is those who, for whatever reason, are managing to get on, in difficult economic times, better than others. The most widely accepted view is that that sort of person should be paying up.

And the £1.7bn bill now presented to the UK? It is largely the result one thing: ‘since 1995 [the UK’s] productivity has grown faster than almost every other major economy’.

Admittedly, there hasn’t been much competition – what with Italy’s economy shrinking in eleven out of the last twelve quarters, or the Greeks allegedly spending much of the last twenty years sleeping in the sun. But how well or badly finances are managed in relative terms, or how much or little work two people do, have never been part of a conversation when it comes to assessing the ability to pay tax. One thing and one thing only has: how much you’ve made in a given period. Some of those counted among ‘the rich’ might not feel very rich, but they are rich in relative terms.

Just like Britain compared with the rest of Europe, in fact: we’ve made more, so we’re being asked to pay more. That is exactly what widely popular progressive tax systems are designed to achieve. Which is all very easy to call for when it’s to do with someone else’s finances, of course. Apparently it is not so popular when levied against the country as a whole.



Revenge porn and Brooks Newmark

Revenge porn is about to become a criminal offence, punishable by up to two years in prison. As the Guardian reports, ‘there has been mounting political pressure to outlaw the practice of humiliating former lovers by posting intimate pictures of them online.’

But the front page of the Sun on Sunday is fine, presumably? Because what is the difference between revenge porn between private individuals, and selling the media a selfie that you exchanged with some MP?

On what basis are photos of Brooks Newmark fair game for the front page of a newspaper, in a world where posting embarrassing private pictures of your former lover on Facebook is about to become a criminal offence? Even without any new law, their publication is a clear breach of copyright, whichlies, in a selfie, with the taker.

The defence, I suspect, will claim ‘public interest’. How so? Zoe Williams, no fan of his, pointed out how little Newmark’s sexual encounters have to do with his office.  Is he a hypocrite because he is married? What do we know of his marital situation, or what was known before publication? Did anyone check? His sex life at home may have been non-existent; his playing away might have been by mutual consent. Who are we to judge? Who, still less, is the Sun on Sunday? Or the Daily Mirror before it, casting around for anyone with weaknesses?

As Damian Thompson suggested on Coffee House yesterday, Brooks Newmark seems to have had those in spades. Outwardly successful, he was actually a bloke in his mid 50s who was a bit down with life and wanted a bit of an ego boost. Not everyone deals with that by trading selfies, but is the fact that he did anyone else’s business than his and hers? She might now say bitterly that she thought she was the only girl in his life, but by such things is ‘revenge porn’ defined. For the fact that this publication has sneaked in ahead of the new law by a matter of days, it has destroyed a fragile man’s career.



This piece originally appears on the Spectator Coffee house blog, here.

Mississippi Million

I just tweeted about John Pritchard’s attempt to raise £1m for Right to Play, which he is doing by rowing the length of the Mississippi. This is the mail I just received from him that provoked the tweet.  I thought I would post it in case any of you is moved to help him reach his total. He has moved his fund-raising off his more complicated site onto the much simpler format of Just Giving.


I write to you from Greenville, Mississippi. I have now rowed over 1,500 miles and have less than two weeks until I reach New Orleans on the 25th October. I now need to address the fundraising aspect of this challenge in deadly seriousness and I need help from each and every one of you.

We have so far raised $409,000 for Right To Play. By the time we reach New Orleans, I need this total to be at or about $750,000 because when we get to that level, my ability to seek matching funds from friendly corporate supporters, together with Gift Aid, will mean we are pretty much guaranteed to make our target of $1,000,000. The achievement of this will be a truly momentous milestone for Right To Play and the one million children that we help each and every week.

You are my friends and the friends of my friends. You are some of my very closest family and connections and some of you may not have even heard of me until this madness occurred and someone made you aware of it. But just like the participant crew members, I very much need your help. In asking for this help, I know that many of you have already given most generously and if you have, I ask that you look further to others who may be moved by this challenge.

I need you all to understand the critical importance of reaching the fundraising target. I cannot stress sufficiently how important your contribution is to the total. While some have access to significant sums, others need to spread their net widely, but it is in the collective that our strength lies. This is your one opportunity, so please give it everything – I most certainly am.

Sometimes, large numbers like $1,000,000 can seem truly daunting and the concept of even the most modest donation may seem insignificant. But I want you to consider this, please, with all seriousness.  During these three months, I will have rowed well more than 500,000 strokes on the Mississippi. Could I ask you and all your contacts to consider donating £2/$2 for just ten of the strokes I will have rowed? If everyone contributes £20/$20, then we will easily begin to reach our target and all of you will, quite rightly, bask in the knowledge that for a relatively modest amount, collectively you have made all the difference.

I know this is a lot to ask, but I can promise you that all the miles of effort, sweat, strain and pain, all the sores and cuts and blisters, all the sleepless nights in hotels and motels will be as but nothing if we can reach our goal.

And remember one very important fact – every penny or cent raised goes directly to Right To Play. All expenses relating to this – the purchase of the boats, the transport, the accommodation, the food and drink, the equipment and every expense relating to the project – has been covered by sponsors, friends and by Julie and me.

To make a donation, please ask your friends, family and supporters to visit https://www.justgiving.com/MississippiMillion

Thank you for reading this and acting. Now let’s smash this ball out of the park.



This is Schoolboy’s Own stuff…

I nominated dad to do the #icebucketchallenge.

Here he is doing it, with the additional requirement demanded when I nominated him…

If you’re wondering, he’s got my daughter to his left, and my sister to his right… and he’s… Oh. He’s going to need both of them………

If you want to donate to Regain as dad explains, you can do so on JustGiving on this link.

BBC 10 o’clock news on MOTD 50

Barry Davies on MOTD at 50

Dad was on BBC Breakfast this morning talking about his return to Match of the Day on Saturday (when he will be at Selhurst Park doing Crystal Palace against West Ham), as a one-off to celebrate the 50th anniversary of the programme. He officially retired from MOTD in the first month of the 2004 season, when his contract came to an end after a match between Manchester City and Arsenal.

Here was this morning’s piece.

Interview with CalvinAyre.com

Here’s an interview I did about the potential impact of UK licensing earlier in the summer

Anyone for free not-quite-legal-advice?

I have had a lot of people comment to me about my two blogs (here and here) about the Gambling Commission’s view of information-sharing arrangement (particularly with the issue being raised in the GBGA’s case against the forthcoming Place of Consumption Tax (paragraph 41 (4) at the top of page 19). So I thought it worth getting a rather more expert view on the Commission’s position, rather than relying on my own rather amateur effort.

But where to go for such a thing, I wondered – before the thought struck me.

Back in my Betfair days, it may be remembered that we had the odd legal issue or two on which we needed sound advice. That advice always came from the same source – a man who has since retired as a practising QC, but who retains an interest in the industry and who knows gambling law as well as anyone on the planet. Might Simon Mehigan QC, I wondered, offer me his thoughts?

I contacted him. I was right that he is no longer practising (although he’s still editing Paterson, the ‘bible’ of licensing law), and so would not be in a position to be instructed even if I were so minded. But he agreed that he would write me an opinion on the issue as if he were, on the basis that I accept that he is not covered by legal indemnity insurance, and is not offering legal advice (either to me or to anyone else), and make clear that I (and anyone else) would hold him harmless against any claim that might arise in relation to this or any associated topic.  Of course, I agreed.

Herewith, on that basis, the considered view on the topic of those two blogs of a retired QC, presented as if I had gone to him as a client and paid him for his services, when in fact neither I nor anyone else has done neither: I have asked him as a former colleague, and no money has changed hands between us. In return for his input, a donation has been made to Emmaus UK, a Cambridge-based UK charity working to end homelessness.

It’s only a view, of course; but I wish the Commission’s position were watertight, and it seems to be anything but. It will be a disaster, in my view, if the new regime is challenged the moment it is introduced – particularly on an issue that is peripheral, can be corrected, and seems to be staring everyone pretty clearly in the face.


Note re FAQ 29


  1. FAQ 29 and the answer to it were published in 31.7 2014 by the Gambling Commission (“GC”).  The issue raised is whether the GC has power to share information with “other regulators” (i.e. those not currently listed in Schedule 6 Gambling Act 2005) without any expansion of that Schedule.  In answering “Yes” the GC relies on the absence in the 2005 Act of any “general prohibition  on the provision of information by the Commission to others”.  It claims to have a general power to disclose information provided to it “if it considers it appropriate to do so, as long as it complies with any general applicable legal requirements” such as data protection law.
  2. Mark Davies has, in his blog dated 4.8.14 (foreshadowed by a blog of 29.7.14) raised significant questions about the answer to FAQ 29.  In my view he was right to do so.  I have reached the conclusion that the GC’s answer is wrong and that the GC can only disclose to those bodies listed in Schedule 6.  It has no general power to disclose.  Its reliance on the absence of any general disclosure prohibition is misconceived.
  3. My reasons for so concluding are as follows:

3.1          The GC was entirely created by the 2005 Act; Part 2 thereof sets out a number of basic rules in relation to it and other Parts (e.g. Part 5) refer to specific powers/duties.  Of particular relevance to FAQ 29 are s. 30, Schedule 6, and ss 350-352A.

3.2          s. 30(1) gives the GC power to provide information received by it in the exercise of its functions to any person listed in Schedule 6 and then only if the recipient uses the information in the exercise of  its own or the GC’s functions.  s. 30 (3) and (4) contain other powers of disclosure, although they do not appear to be relied upon under FAQ 29.   s. 30(8) specifically refers to s. 352; that expressly forbids any disclosure which contravenes the Data Protection Act 1998.   Clearly, the power given by s. 30(1) is specific and limited.  It contains no general power to disclose.  It does not say that disclosure can be made “to any persons or bodies”.  It says that disclosure can be made to such persons “listed in Schedule 6” and then only for certain particular purposes.  It does not  give the GC a general discretion as to whom it may choose to disclose.  Its power to disclose can only be exercised in accordance with s. 30(1).  Nor does it refer to  Schedule 6  as listing mere examples of bodies to whom disclosure can be made; there is no mention of  “including” or similar words.

3.3           When we turn to Schedule 6 we see three categories of recipient set out in Parts 1-3.   Since 2005 the list in each category has been amended both by deletion and addition; for example, see SI 2012/1633 which has made extensive changes to Part 3, the list of Sport Governing Bodies.  Schedule 6 also contains various Notes, under Part 4; Note 1 expressly acknowledges that information provided to the persons etc. listed under Schedule 6 may be subject to overriding restrictions as to its use under other enactments.  It envisages the possibility that the body may not have complete freedom as to the use it makes of information provided by the GC.

3.4           s. 350(1) gives power to any Schedule 6 recipient to provide that information to another Schedule 6 body “in the exercise of a function under the Act” and s. 350(2) enables only Part 1 recipients to provide information to HMRC “for use in the exercise of any function”.

3.5           s. 351 gives power to the Secretary of State to amend Schedule 6.  It does not enable the GC to do so.

3.6           s. 352A, inserted by the FA 2006, refers to the concept of liability  for wrongful disclosure and makes provision for limiting it.

3.7          It is quite clear to me that the 2005 Act sets out a detailed series of rules about disclosure by the GC.  In particular it places a number of limits on that disclosure – to whom it’s made, to what it relates.  They are comprehensive and cannot be ignored. Nor can they be supplemented in the manner suggested by the GC.

4. Moreover,  if the GC answer to FAQ 29 is correct it seems that at least the provisions of s. 30(1) Schedule 6, s. 350 and s. 351 are otiose.  No court will accept that they are.  Further,  if the GC answer is right what we’d see in s. 30(1) is a general power to disclose to any persons etc. ; however,  instead we have a specific and limited power.  That cannot be reconciled with the claims made by the GC in FAQ 29.  Additionally,  the fact that disclosure by the GC to a body not listed in Schedule 6 can evade the limitations on disclosure found in s. 30(1) and in Note 1, Part 4, Schedule 6 (at least in respect of overseas regulators) is another indicator that the only proper disclosures the GC can make are those expressly sanctioned by the 2005 Act.

5. The GC reliance on an absence of a general prohibition on the provision of information to others is misconceived.  It flies in the face of the words used in the 2005 Act.  If the GC wishes to disclose to bodies not listed in Schedule 6 it will have to ask the Secretary of State to amend that Schedule; until any such an amendment occurs it cannot make disclosures to any body outside s. 30.

Simon Mehigan Q.C.

20th August 2014

Priceless forum post: Devilfish, take a bow

I am just going over some old Betfair memorabilia, and I came across this post from the forum from October 2003 which I found so entertaining at the time that I kept it.

Those were the days…!


Posted by : devilfish 09 Oct 13:02 

I hope you all showed your support for BHB Chairman Peter Savill’s crusade in preventing shortfalls in the Exchequer’s revenues. However, his recent press release also highlighted another issue dear to all our hearts – the integrity of racing. I’m showing my support to him on this one by sending the following letter to the Jockey Club:

Dear Sirs,

The recent programmes highlighting the corruption of racing have really infuriated me. Just look at what goes on:
– horses being given three quiet runs to obtain a lenient handicap mark
– connections having special agreements with bookmakers so that they tip them off when one of theirs is fancied, presumably so that the bookmaker can then refuse to take any more bets on that horse.
– a trainer of Jamie Osbourne’s stature openly admitting that “we don’t mind cheating”. We’re not talking about some mickey mouse permit holder here, we’re talking about a guy who trains a horse for the chairman of the BHB. Admittedly I use the word trains loosely: he couldn’t get the said horse to leave the stalls with the rest of the field on either of its first three back end runs.

The whole impression I am given is of the sport being a massive clip joint, with owners and bookmakers with their snouts in the trough while Joe Public is kept in the dark.

If I could just bring to you one example that certainly raised eyebrows in these quarters. There was a maiden handicap over 5 furlongs on g/f at Thirsk last month: a desperate classification of race recently introduced by the BHB that would appear to be little more than a cheats charter. In it there was a horse that had run once previously over 5 furlongs and once previously on g/f ground, so it wasn’t like radically different conditions could excuse his sudden improvement. According to postmark ratings he improved by 51lb and 55lb respectively on these runs on this his handicap debut!

It may just have been coincidence that the horse was punted from 8s to 3s. It may also just be coincidence that I couldn’t get a bet on this horse with any bookmakers at the early shows, although they were happy to lay me all I wanted on any other horse. I just thank the lord for the transparency the exchanges offered me on this occasion, for there was little chance of me predicting such miraculous improvement on any public form.

Oh, nearly forgot. The horse was called Raccoon, the owner was one P D Savill.

Yours etc

Are you sitting comfortably?

The letters page of today’s Times makes for hilarious, comforting, or irritating reading, depending on your point of view. A large selection are public replies to John Humphrys’ query (in the context of his debate with Melvyn Bragg), asking what annoys people when it comes to language.

Most people who have worked either for or with me would probably call me a pedant in this regard, because the sight of a misplaced apostrophe is enough to drive me to apoplexy. But in truth, I am well ensconced in the camp that says language is about making oneself understood, and I therefore recognise that usage is fluid. That is precisely why I rail at people who put an apostrophe in its for the possessive, because it’s a completely different word, and therefore renders a sentence meaningless when mis-used. Anything that requires someone to read something twice is worse than simply an irritation. In contrast, saying ‘for free’ (even in the knowledge that free on its own already means ‘for nothing’) is just modern usage, and if you objected to the ‘are’ after ‘a large selection’ in my second sentence and insist it should be ‘is’, then you’re a bore: the letters are clearly the implied subject.

The letter that stands out for me, on that basis, is the one that draws attention to the sudden ubiquity of the word ‘sat’, as in ‘I was sat there’. It has to be the most irritating expression on the planet, for two reasons: first, that it means something already (just not the thing that people use it to mean); and second, because no other verb is mis-used in the same manner. Worse, if any other verb were, people who object to objections about the use of ‘sat’ would laugh.

Imagine, for example, that someone said, “I was swung on a rope” when they mean “I was swinging”; or “yesterday, I was sung in the shower” for “I was singing”. People would look at them as if they were nuts. “I was run to the shops”; “I was flagged that there was a problem”; “I was fed my baby”… All these things mean something, but clearly something very different from, “I was running to the shops”, “I was flagging that there was a problem”, and “I was feeding my baby”. I am sure no-one would dispute it.

And yet, with sat, new rules apply. “I was sat on a bench in the park” means someone physically put me there, not that I was sitting watching the world go by.

“Oh what pedantry!” I hear you cry… And yet, you were with me a moment ago when we talked about you having been fed your baby, and the exact equivalent applies. The different uses have very different meanings. I am sure you wouldn’t ever say you were dogging, when actually you were dogged…

Doubtless some will argue that the meaning is obvious in one case, but that simply isn’t true. There are plenty of occasions when the real meaning of sat is relevant to convey a specific purpose, but the ability to explain it is increasingly becoming lost. “I was sat next to the Prime Minister at dinner” does not mean, “I was sitting next to the Prime Minister (and I am now going to tell you what happened next)”. It means that there was a table plan, and on reading it, I found that my allocated seat was right alongside the one occupied by the First Lord of the Treasury. It’s a different story altogether, as ten years ago would have been obvious. In ten years’ time, people might be saying “I was helped” to convey that they were helping, and no-one will be sure which they mean.

So that’s my rant of the day. At least “its” and “it’s” are only confusing when written down, such that in everyday speech you don’t need to try to work out what someone means when they effectively say, “the sun has got it is hat on”. But ‘sat’? Well, I hope for your sake that you never find yourself sat on the fence.

Does FAQ29 comfort you or scare you?

I reviewed the papers this morning on BBC1 at some ridiculously early hour, and one of the articles that came up was a piece in the Telegraph that talked about how the Government plans to share data across Whitehall departments. It amused me, given that I had written about data sharing (by the Gambling Commission, with overseas regulators) last week.

I don’t know if that piece, published on Tuesday, was what prompted a Gambling Commission FAQ on Friday, but whatever the cause, this is what they put out, apparently knocking down my points one by one:

29 Won’t Schedule 6 need to be expanded to allow the Commission to share information with other regulators?

31 July 2014

29.1 No. Unlike some other regulatory statutes, the Gambling Act 2005 contains no general prohibition on the provision of information by the Commission to others. That means that it is not unlawful for the Commission to provide information to other regulators if it considers it appropriate to do so, as long as it complies with any generally applicable legal requirements such as those arising under data protection law where personal data is concerned.

29.2 Schedule 6 (together with section 30) simply gives the Commission the express power to provide information to certain bodies, thereby simplifying the provision of information to British organisations and international sporting bodies it deals with regularly. It also enables the bodies listed in Schedule 6 to exchange information between themselves, and specifically empowers the Commission to charge for the provision of information to those bodies.

29.3 If the Commission proposes to provide information to a body not listed in Schedule 6, it will need to give greater consideration to whether (for instance) that body is capable of handling the information responsibly and fairly. Of course in many circumstances the provision of information will be with the consent of the data subject, in which case no legal issues arise. The Gambling Act 2005 also imposes no restriction on the Commission’s ability to receive information from regulators in other jurisdictions.

Hmmm. Let’s just consider this for a moment.

So, the absence of a general prohibition on sharing information with overseas regulators makes doing so implicitly fine. Really? On the one hand, Parliament felt it necessary to state explicitly in primary legislation with whom and in what circumstances information could be shared (when it related to UK statutory bodies), but on the other (when it comes to overseas regulators) it isn’t bothered? Is it likely that a previously ultra-prescriptive Parliament (which as I mentioned was obliged, in order to add the IOC, to make an amendment through the Olympic Act 2006) is now happy to leave things to the Commission’s sole discretion, with no specific guidance as to what information it could share (and who with)? Personally (and notwithstanding the direction of travel indicated in today’s Telegraph piece), I find that an unlikely scenario, but the Commission throws in the idea that in many circumstances the provision of information will be with the consent of the licence applicant, in which case no legal issues arise. Oh, so fair enough, you might say. Unless you think, on a less charitable reading, that the Commission’s safety net is to rely on the ostensible consent of licence applicants to cure what it realises is a defect in the law.

Am I being harsh? Well, as I said last week, I’m no lawyer: maybe I’m just seeing things where there’s nothing to see. So I thought I would run it past a lawyer for a view, to see if I was just nuts. This is what I got back:

The GC’s interpretation of section 30 (read with Schedule 6) would result in an effect quite different from that which Parliament intended, and would fall on the wrong side of the boundary between interpretation and amendment of a statute. What the GC is overlooking is that while it might have been reasonable for Parliament to have included a general power to share information with overseas regulators, it is clear that the express provisions of the GA interpreted in their context do not confer this power on the GC by necessary implication. They provide no basis for any implication that it was intended to be included. A necessary implication is a matter of express language not interpretation. What Parliament would probably have included in the GA if it had thought about it is, frankly, irrelevant.

Let’s backtrack. To underline the point, in case you have forgotten since my last post: I don’t disagree with any of the Commission’s motives, nor do I dispute that in clearly-defined circumstances, the information it is trying to share is sensible. The Commission clearly has the authority to share information with overseas regulators where the information requested is needed to investigate or prosecute a crime. It also clearly has the authority to do so with those bodies listed in Schedule 6. It also clearly has the right to do so if it does so in a manner legal under other data protection law. None of this is in dispute.

But any decision suddenly to ignore parameters (or make up its own) would get the Commission into real trouble, perhaps at the expense of the whole house of cards. And what is not clear from the FAQ statement on Friday is how sharing information with overseas regulators for the purposes of licence applications made to those regulators falls into any of the three categories mentioned above.

The Commission position – that it is not unlawful for it to provide information as long as it complies with any generally applicable legal requirements such as those arising under data protection law where personal data is concerned – is entirely correct and impossible to dispute. But that’s exactly the point. It is ‘legal’ to share this data only on the back of a huge catch-all disclaimer on page 20 of the application form for a licence, by which applicants are forced to waive all rights to data protection in order to have the right to apply in the first place. The Commission is relying on a blanket waiver which is included as an application-form requirement in its small-print. This time, I don’t think I need to be a lawyer: Blind Freddie could see that would be very difficult to defend.

The fanciful scenario I mooted last week (of information being given to the Russian Gambling Commission in 2015) seems to be addressed by the Commission’s statement that before it shares information with an overseas regulator, “it will need to give greater consideration to whether (for instance) that body is capable of handling the information responsibly and fairly“. But is that enough? It barely gives me any comfort, and I’m just some bod watching on the sidelines. I hate to think what someone giving up a load of data thinks of it. Under what circumstances can an overseas regulator request information? What can it ask for? What about the stuff that might have been provided that is subject to legal professional privilege? What protections are there that the overseas regulator has no ulterior motive behind wanting the data?

I wrote last week that the current position might stop some applying, but having seen the apparently flimsy legal basis on which the Commission has based its response, I think that that worst-case scenario was understated. On the basis of FAQ29, aren’t we looking at the possibility that sharing of data in this manner would open up the Commission (and its officers, presumably) to legal claims? I can imagine companies claiming financial and reputational loss from the misuse of information that was shared with an overseas regulator – a circumstance in which it would be pretty uncomfortable to be testing the validity of that enormous page-20 disclaimer. I can even imagine those that have given their consent claiming that they were coerced to do so, because they were forced to sign a disclaimer without which they could not enter the valuable UK market. Is that really where we are heading?

Schedule 6 provides detail about the various parties with which the Commission can share information. Each is named, and the list can be added to. Betfair’s MOU list that I had responsibility for got changed every time we signed an MOU. By my understanding, that is the way that Data Protection issues work.

I suppose that alternatively, rather than seeking an amendment to Schedule 6 and making explicit which overseas regulators the Commission can offer information to, the Commission could in every future instance take account of all legislation that could possibly be relevant to its sharing information with an overseas regulator before the decision to share the information is taken, keeping detailed audit trails of having done so to protect it from legal challenge by operators in an industry not known to be shy about launching them.

I know which I’d rather be doing.

Is this over-sharing? Feels like it to me…

I’ve been looking a lot at the requirements of the in-coming gambling legislation and there’s one part of it that has me scratching my head more than any other.

It relates to the sharing of information with third parties, which was a subject I once spent a great deal of time looking at when we (at Betfair) put together the Memorandum of Understanding that allowed us to give data to sports governing bodies. I remember the significant number of hoops we had to jump through, in order to ensure that the whole framework that we were putting in place did not fall down in legal terms. Looking at current plans, I am trying to work out what must have changed for the Gambling Commission not to be heading for a legal minefield that it hasn’t spotted.

The licence application process under the new legislation requires an applicant to disclose a considerable amount of information to the Gambling Commission, and the Commission is clearly of the view that it has the power to share information with overseas regulators.  I know that not because I have asked them, but because they have stated so publicly on at least three occasions.

The first of those was in the Statement of Principles for Licensing and Regulation published in September 2009, where it says that:

The Commission will seek to build and maintain good liaison and working relationships with local authorities, other regulators and law enforcement agencies and other regulators to share relevant information and, where appropriate, investigate offences. (Paragraph 4.11, p.10)

Things aren’t entirely clear here: perhaps ‘other regulators’ appears twice in order to emphasize that it covers overseas regulators (on the basis that ‘local’ relates not just to ‘authorities’, as I would read it, but to the three things that follow it). Who knows? It also isn’t clear exactly what information would be shared, nor how you determine ‘relevance’, nor whether the information can be shared proactively or reactively (which I seem to remember was a major issue when it came to our MOU process). And it seems at least possible that the wording as phrased could result in the sort of fishing expedition that we were always told it was essential to prevent, in order to ensure that the rules were not open to a challenge. But in a way, who cares? To my knowledge no challenge has been made to date, and it’s been sitting out there for five years without anyone saying boo.

The trouble is that we are now entering a period where a new load of licencees will be scrutinising this stuff, which probably explains why the Commission has set about trying to clarify it. A consultation document of proposed amendments to that initial document, published in July, is much more defined. It says that the Commission intends to add:

an explicit statement that the Commission will share information with other bodies, where appropriate. This may include for example sharing data with relevant public authorities, overseas regulators for the assessment of individuals’ suitability to be licensed, the prevention and detection of crime for the purpose of assisting another body to exercise its functions.

Not much doubt here, then, that the Commission sees itself as empowered to share information that it receives with overseas regulators, who are now specifically mentioned.  That ability to share is still limited to where ‘it is appropriate’ to do so, and two circumstances are given as examples to try to give greater clarity as to what that means. They seem perfectly sensible to me: to assess an individual’s suitability to be licensed; and to prevent and detect crime. We still don’t know what information that might be, though; and the implication that the Commission will share it proactively seems to my ailing memory to put it into a very grey area of the law. But then there is further clarity still, because a huge disclaimer in the Jurisdictional Rider in its application form appears to give the Commission carte blanche. That reads:

The information provided in this application will be processed for the purposes necessary for the Gambling Commission to carry out its functions and meet its legal obligations.  The data may be shared with third parties who fulfil a service on behalf of, and under the express instructions of, the Gambling Commission. It may also be shared with other bodies where it is necessary to do so and where we are legally required or permitted to do so. This may include sharing data, when appropriate, with relevant public authorities, overseas regulators, law enforcement agencies.  Sharing data is primarily for the purpose of performing our regulatory functions such as assessing individuals’ suitability to be licensed but it may also be necessary to share information for the prevention and detection of crime or for the collection of tax and gaming duty … We will treat all information as confidential and will only disclose that information to third parties where it is necessary to do so in order to carry out our functions or where we are required by law to disclose the information.” (p.22).

So that would appear to be that. Except that the ability to share information with third parties laid out in this disclaimer is dependent on the Commission being legally required or permitted to do so, as one might expect. And suddenly, as a result, the whole thing is, it seems to me, thrown very much into doubt. Because it surely means that what needs to be considered is none of the three statements quoted above: not the Statement of Principles for Licensing and Regulation; nor the consultation document; nor the Jurisdictional Rider. What matters, surely, is what it says in the Gambling Act 2005.

Now, I stress (as if you didn’t know it) that I am not a lawyer. But it seems to me that two sections of that Act are relevant. The first of those is Section 30, which provides the following:

(1) The Commission may provide information received by it in the exercise of its functions to any of the persons or bodies listed in Schedule 6—

(a) for use in the exercise of the person’s or body’s functions, or

(b) for the purpose of a function of the Commission.

My layman’s read of that tells me that this means that the Commission is not compelled to share information with any of the persons or bodies that are listed in Schedule 6, but that it can if doing so helps it, or the someone or some group it shares with, do a better job. This in turn means requiring that the Commission satisfy itself that the information needs to be shared for some regulatory function. So far so good.

But then Schedule 6 duly lists everyone relevant to this clause. And what is clearly intended to be an exhaustive list (as is evident from the fact that it was (I think temporarily) amended to include the IOC with the London Olympics Act 2006) does not include a single overseas regulator. Here’s the list taken directly from the Gambling Act 2005:

SCHEDULE 6 Exchange of Information: Persons and Bodies

Part 1: Persons and Bodies with Functions under this Act

A constable or police force
An enforcement officer
A licensing authority
Her Majesty’s Commissioners of Customs and Excise
The Gambling Appeal Tribunal
The National Lottery Commission
The Secretary of State
The Scottish Ministers

Part 2: Enforcement and Regulatory Bodies

The Director and staff of the Assets Recovery Agency
The Charity Commission
The Financial Services Authority
The Director General and staff of the National Crime Squad
The Director General and staff of the National Criminal Intelligence Service
The Occupational Pensions Regulatory Authority
The Office of Fair Trading
The Serious Fraud Office


Part 3 Sport Governing Bodies

The England and Wales Cricket Board Limited
The Football Association Limited
The Football Association of Wales Limited
The Horseracing Regulatory Authority
The Lawn Tennis Association
The Irish Football Association Limited
The Jockey Club
The National Greyhound Racing Club Limited
The Professional Golfers’ Association Limited
The Rugby Football League
The Rugby Football Union
The Scottish Rugby Union
The Scottish Football Association Limited
UK Athletics Limited
The Welsh Rugby Union Limited


In fact, what is noticeable about this list is that every name on it is that of a UK statutory body or person.  It seems fairly clear that as regards providing a legal basis for supporting recent Commission statements, subsection 30(1), well… it doesn’t.

The other relevant section seems to be Subsection 30(4). This one provides that:

(4) The Commission may provide information received by it in the exercise of its functions to a person if the provision is for the purpose of—

(a) a criminal investigation (whether in the United Kingdom or elsewhere), or

(b) criminal proceedings (whether in the United Kingdom or elsewhere).

OK: so again, at a quick read, this one helps. It seems to empower the Commission to share information with overseas statutory persons. But… It seems to be about overseas law enforcement agencies or prosecuting bodies more than it does about regulators looking at issuing licences; it also seems to necessitate that information-sharing being for the purpose of an overseas criminal investigation or overseas criminal proceedings, which will surely have an impact on what information can be shared; or alternatively it seems to require that a criminal investigation is taking place. What is does not appear to do it support the proactive sharing of information in relation to a licence application.

In short, the legal basis found in the Gambling Act, which the Commission appears to be assuming allows it to share information with overseas regulators, seems to me to be nowhere near as far-reaching as the Commission suggests in all three of the current version of its Statement of Principles for Licensing and Regulation, its consultation document, and its Jurisdictional Rider. Those three documents, it seems to me, imply that if I applied for a licence (and maybe was even turned down for one), and in a year or so Russia set up a Gambling Commission and I applied to it for a licence in turn, the Gambling Commission would consider itself to have the right to share with the Russians any information I had put in my form.

All of which is a very long story, I admit, and possibly a very tall one. I am not suggesting that the Commission has malevolent aims in its data-sharing plans – far from it. Indeed, I can see what it is trying to do, and why – which may lead you to ask why on earth I care, and why I have spent ages writing this blog… As a paid-up member of the ‘Less Bothered about Surveillance’ Club, I can see your point.

The answer is that I spend a lot of time having people tell me their worries about whether the new regime will work in a way that reinforces, rather than undermines, its intentions. And it seems to me perverse that in 2005 it was deemed necessary to list by name both the FA and the LTA, on the basis that ‘Sports Governing Bodies’ didn’t cut it, and at the same time be absolute prescriptive about the circumstances under which information can be shared; and yet in 2014 (when those applying for licences are likely to be far jumpier about data sharing than was previously the case) it is somehow fine to talk blithely about ‘overseas regulators’ and be vague about what might be shared, as if it isn’t going to give prospective applicants the heebie-jeebies in a way that will result either in obfuscation, or in persuading them not apply at all.

Perhaps I very much misunderstand the position. But assuming I haven’t (in which case I’d be grateful to know why), then it seems to me on that basis that at the very least, the explicit list of organisations with whom the Commission can share information is going to have to be expanded, and the basis on which it will decide the relevance of what it will share (perhaps even what it will share) will need to be significantly clarified.

I can see that that is really boring, and it will result in yet more work for an organisation that probably has it coming out of its ears. But just as, when we did the MOU, we knew that unless it was watertight, we would scare off half our customers, so is it true here that without tighter rules and better clarity, some applicants will not be given the comfort of privacy that they will see as important.

And the significant danger of that would be that the introduction of the new regime is considerably less likely to be a success.


Why is an Assisted Dying Bill so difficult?

I’ve read a lot about the Assisted Dying Bill, being debated (at Second Reading) in parliament today with a record number of peers having asked for the right to speak. This morning’s papers have a number of articles, with arguments for (in the Independent, for example, and from the man bringing the bill himself, Lord Falconer, as well as some downright bizarre pieces like that from Melanie Reid, who seems to think it is a feminist issue) and against (again in the Independent, in addition to Justin Welby’s piece in last week’s Times, and Tanni Grey-Thompson’s interview on yesterday’s BBC News). Despite that, I am baffled by the way the bill is framed, which seems to me completely to miss the point.

In an effort to ensure that the Bill passes, it has been carefully worded to ensure that it is about helping those who are terminally ill and within six months of death to die earlier if they wish. There is a lot of talk about pain and suffering, and great emphasis placed on demonstrating that this is not euthanasia and not assisted suicide. It is about helping the terminally ill bring about a quicker end.

I guess the reality is that it is only possible to speak from a personal perspective on a subject such as this (although many seem convinced of their right to speak for others).  Mine is this: if I woke up one day with locked in syndrome, or I was suffering badly from dementia such that I was no longer in control of my mind; or from motor neurone such that I was no longer in control of any part of my body, I would rather be gone than here. The trouble is, in none of those situations am I necessarily terminally ill, or at least not within a predictable six months of death.

A friend of mine had a brother who went to bed one night right as rain, and the following morning was able to move nothing more than his eyelids. My grandfather suffered for years from Alzheimer’s – a fate which, given its partly genetic causes, may await me – bewildered and scared by everything, including all his visiting family, in a nursing home . My father-in-law heroically and stoically succumbed to motor neurone disease over a ten-year period, during much of which he lived a happy existence, but towards the end of which, life must have been torture for him. My next-door neighbour was buried last week after years of problems with dementia, latterly unable to do anything for himself in a manner which was no reflection of the man whose fascinating life was related at the funeral.

Everyone will have such stories. But where, in any of these, does the Assisted Dying Bill help? Pain was not a major factor in any of them, and time was never predictable. (Indeed, as Tony Nicklinson showed over a period of seven years, tragic situations can be prolonged indefinitely.) None of these people would have been able to invoke the new law (should it pass). Whether any or each would have wanted to, I cannot say. What I do know is that I can tell you right now that if any of these fates befalls me, I want out.

Why is it so difficult to legislate in such a way as to allow us to make choices when we are fit and healthy for situations where we are not, and then have those choices reviewed by a third party – a doctor? A judge, maybe – if the worst happens? Where would family pressure be possible, if I sign a document today that says that in the event that I lose control of, say, 90% of my mental or physical faculties, and am unable to express my views on what that means for me, I want my previous views taken into account and want someone to deal with it accordingly?

It seems to me that in every other area, we can make this choice. I can decide today who has Power of Attorney over every aspect of my life if I am catastrophically affected in some way, other than in this crucial area. Instead, we have a Bill which allows someone other than me to make a judgment, but only in specific circumstances which might not cover the situation that I myself find the most terrifying.

Everyone I have ever discussed this with shares similar views to mine: they know in what circumstances they would rather live, and when they would rather not. I can see the issues about people being pressured into decisions they might not want to take, but if the Assisted Dying Bill raises concerns about people who have already passed the point at which they can make clear choices, then surely it at least should address the clear-cut scenarios for those who have not? While that would leave a small number of tragedies for those currently in anguish, it would be no different from tomorrow finding a means of inoculating against a disease that some unlucky person catches today. Who would ever suggest that a future vaccine should be denied to those it would help?

My mothers’ cousin, finding herself in hospital and hearing doctors discussing how the rest of her life was set to pan out, reached up and pulled out all the cords that were connecting her to life-preserving equipment. I know I’d do the same, and so, I suspect, would many others. Given that, can it really be so difficult to frame a law which protects vulnerable people while allowing those of sound mind and body to remove their fear of this kind of terror?



Next in the quiz…

OK, that one was obviously too easy, since both people who have replied to date have said the same thing (albeit that the first person has now changed his/her mind twice).

Here’s another. And this one has more than one question.

The first question is the same – who needs a licence? But then I’d like to know (a) whether you change your answer if Company A, B, C, and D are all owned by the same ultimate beneficial owner or different ultimate beneficial owners? And (b) whether your answer in relation to Company E changes if it is wholly-owned subsidiary of Company A, or if its ultimate beneficial owners of the company are the directors of Company A?


Here’s the scenario:

There is one principal company, Company A, involved in the provision of online gaming software to licensed gaming operators. Company A acts strictly on a business-to-business basis, it has no interaction with players.

Company A sources software from a number of software developers.  Its relationship with each developer is defined by different terms.

Company B is a software developer.  Company A contracts with Company B for the development of games for a fixed payment. Company B develops the games on the instructions of Company A. Company A defines all specifications for the games. The games are designed exclusively for Company A. Company A owns the IP in the games developed for it by Company BCompany B acts strictly on a business-to-business basis; it has no interaction with players.

Company C is a software developer. Company A contracts with Company C for the development of games. Company C develops the games on the instructions of Company A. Company A defines all specifications for the games.  The games are designed exclusively for Company ACompany C retains ownership of the IP in the games. Company C licenses the use of the games to Company A for a specific share of the revenue generated by the games.  Company C acts strictly on a business-to-business basis; it has no interaction with players.

Company D is a software developer. Company A contracts with Company D for the development of games. Company D does not develop the games on the instructions of Company A.  Company D licenses its software to several companies including Company A for a fixed royalty payments.   The games are licensed to Company A on a non- exclusive basis.  Company D retains ownership of the IP. Company D acts strictly on a business-to-business basis; it has no interaction with players

Company E installs and technically supports gambling software. Company E acts on the instructions of Company A. Company E installs and technically supports gambling software sourced from Company B, and licensed that is by Company C and Company D to Company A.

None of the above mentioned activity takes place in the UK. All contracts are entered into by the parties each acting as a principal and contracts with each other on arm’s length terms.