Case Summary and Analysis: Andrew Green v Petfre (Gibraltar) Ltd (t/a Betfred)
On 26 January 2018, Mr Andrew Green played a game called 'Frankie Dettori's Magic Seven Blackjack' on Betfred’s mobile casino app. Mr Green also played on a side bet feature within the game. At the end of Mr Green’s gaming session, which lasted for around five hours, the app showed that he had won £1,722,500.24.
Mr Green tried to withdraw his winnings but was prevented by the app from doing so. He called Betfred’s customer service team. They congratulated him and informed him that they were carrying out routine checks, which would need to be completed before he could withdraw the money. Mr Green was later informed by Betfred that because his winnings were so large, it was necessary for them to also carry out a check with the third-party game provider, Playtech. Playtech subsequently notified Betfred that there was a glitch in the game, and Betfred informed Mr Green that as a result his winnings would not be paid out to him.
Neither Betfred nor Mr Green had been aware of the fault in the game, which meant that players who played the game for a long time without a break had better than intended odds of winning. The glitch affected so called “trophy cards”. As part of the relevant game, if users accumulated a total of seven or more trophy cards in two consecutive rounds in the same hand, they won a prize of 7777 times the side bet stake. The error was apparently caused by the game not resetting properly, which led to Mr Green attaining many more “trophy” cards than should have been the case. The explanation given by Playtech is that trophy cards were not reset after each hand, with the effect that cards with a trophy remained marked as trophy cards when reinserted into the deck and new ones were allocated also. The result of this is that the number of trophy cards increased the longer the game was played. Betfred claimed that eventually at some point over time if play did not cease, the player would have held only winning cards. The intention of the game was that the chance of a player achieving the jackpot of 7777 times the side bet stake just once should be 0.00018361%, however Mr Green won the jackpot three times during his session.
Mr Green issued a claim for his winnings relying upon certain clauses in a terms and conditions document he had clicked to accept when he first accessed the Betfred site a few years before. In particular, Mr Green claimed a breach of a promise contained in the clause stating that customers may withdraw funds from their account at any time provided all payments had been confirmed.
Betfred disagreed with this position and argued that the clause upon which Mr Green relied referred to the right to withdraw money that had been deposited by the customer, not payment out of “chip balances”. In addition, they argued that because there was a defect in the game, they were entitled not to honour the pay-out and sought to rely on various terms in the general terms and conditions, the additional EULA that applied to the mobile app, and game rules for the specific game. Finally, Betfred argued that the parties were both operating under a mistake when Mr Green played the game, which meant that the contract between them was void.
In response, Mr Green claimed that (i) there was no malfunction of software but rather, a malfunction of the game, which was not covered by Betfred’s exclusion clause, (ii) the relevant term was not sufficiently notified to him, and was inaccessible and unclear, meaning it therefore did not form a part of the contract, and (iii) the doctrine of mistake was not applicable to the circumstances of the case. In particular, Mr Green relied upon the findings in Spreadex Ltd v Cochrane  EWHC 1290 (Comm) and explained that it was irrational for Betfred to have believed he had accessed, read, and understood the terms and conditions, and accordingly they were not incorporated into the contract between the parties. On this basis, Mr Green sought summary judgment to strike out Betfred’s defence.
Mrs Justice Foster said there were three questions to consider:
Meaning: Was the wording of the exclusion clauses adequate to exclude liability to pay out winnings for the glitch which occurred?
Incorporation: Did the exclusion clauses form part of the contract between Betfred and Mr Green?
Reliance on the exclusions of liability: Were the exclusion clauses enforceable as a matter of consumer law against Mr Green?
1. Meaning: The wording of Betfred’s exclusion clauses was not adequate to exclude liability to pay out winnings for the glitch
The Judge found that the wording of each of the clauses Betfred sought to rely on was inadequate “as a matter of the natural meaning of the language in context” to exclude liability to pay out Mr Green's winnings as a result of the game fault.
This was primarily for two reasons. Firstly, the term did not deal with the failure to pay out winnings. The exclusion clauses were not clear that bets are voided as a result of an error and so the obligation to pay the winnings does not arise. Secondly the reference to “malfunction” without further explanation or definition was insufficient to cover the circumstances at hand.
The judge commented:
“There is no definition of the meaning and extent of the word "malfunction" and absent a clear definition the natural meaning of the word in my judgement does not connote the circumstances here. It naturally means, without further words of explanation, something in the nature of a detectable breakdown or interruption in service. It is associated elsewhere in documentation available to Mr Green, with a "computer malfunction" in company with communication interruptions. Here, the Game functioned apparently flawlessly, but produced a set of odds that were not what one party intended. What happened to Mr Green was, as Betfred admitted, in fact possible absent the "glitch", just extremely unlikely.”
The Judge further added that if Betfred were to seek to exclude liability to pay out on an “ostensibly clear win” it would have to be much clearer in what it said on the page.
2. Incorporation: Betfred’s exclusion clauses did not form part of the contract between the parties
The Judge found that none of the terms seeking to exclude Betfred’s liability were sufficiently brought to the attention of Mr Green. This was due to inadequate signposting and a failure to highlight the meaning and intended consequence of the terms. The result is that, even if the terms had been worded in a manner which was effective to exclude liability, they were not incorporated in the contract between Mr Green and Betfred.
The Judge commented as follows:
“As explained, this is the result of the combination of inadequate signposting to these significant exclusions of liability, and the failure to highlight the meaning and effect intended. The unhelpful, often iterative presentation in closely typed lower-case or numerous paragraphs of capital letters meant that the relevant clauses were buried in other materials. These features are exacerbated by the fact that the player must click through and scroll online, searching out what appears to be relevant to him. I do not go so far as to say that it was fanciful to expect that Mr Green would access the Terms and Conditions at all (as in the Spreadex case), but having accessed the Terms and Conditions and then the EULA, it is quite unreasonable to expect he would have found and noted the importance of the key clauses relied upon. This is overwhelmingly obvious in the case of the Game rules where it is highly unlikely, in my view, he would have gone beyond the description in the earlier part of the document as to what to do to play the Game.”
3. Reliance: Betfred’s exclusion clauses were not transparent or fair and consequently were not enforceable against Mr Green
The Judge considered that her findings about the drafting of the terms and the presentation of them meant that they were not transparent or fair and consequently Betfred was not entitled to rely upon them pursuant to the Consumer Rights Act 2015 (the “CRA”).
The CRA provides that consumer terms and notices must be transparent (i.e. expressed in plain and intelligible language) and fair. A term will be ‘unfair’ if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. A term that is unfair will not be enforceable against consumer.
The Judge stated:
“I am prepared to accept, as Betfred argued, that Mr Green was an experienced and competent player of internet gaming. Nonetheless, the nature of the liability sought to be excluded required clear explanation and "signposting" which would have involved a full and clear description of the possibility of a hidden technical defect, and its potential consequences for the gaming contract. Unambiguous language that made it clear Betfred intended to void a payout in such circumstances was necessary.”
It is worth stressing that this case does not mean that an operator cannot exclude its liability for pay-outs in the event of a game fault. In fact, the judge specifically made that point, commenting:
“It is important to say that I do not make any finding that acceptance of terms by means of a "click wrap" is inadequate to form a binding contract that contains limitations to or exclusions of liability. Nor, if adequately drafted and signposted, that, even in the context of an online betting facility, liability may be excluded for events such as occurred in this case. In my judgement the particular context of an online betting contract must however be borne in mind. A player is most unlikely to spend significant time trawling through documentation, particularly if it is repetitive and not clearly relevant to him. The exclusion of or limitation to liability to pay in circumstances where play has continued over a number of hours and is ostensibly wholly valid, is something that would need to be achieved with great care and particularity.”
However, this case clearly highlights that operators need to take great care in both the drafting and presentation of their terms and conditions to ensure that exclusions of liability can be relied upon. In 2018, the Competition and Markets Authority (CMA), the primary consumer law regulator in the UK, commenced an investigation into the online gambling industry. The Betfred case serves as an attention-grabbing reminder of some of the consumer law issues addressed as part of that investigation.
It is strongly recommended that all operators conduct a review of their terms and conditions to consider whether any amendments or updates should be made in light of this judgment.
The key takeaways for all operators are:
The drafting of terms and conditions, particularly terms which may be onerous or unexpected to customers, must be very clear, precise and easily understood. Care should be taken to specifically address and explain key issues, such as the different types of “errors” which may result in winnings being withheld. Broad, vague and ambiguous exclusions of liability are much less likely to be effective.
Consider how terms and conditions are “signposted” to customers.How are significant or onerous terms highlighted, explained and brought to the customer’s attention?Are key terms or onerous terms set out separately to other terms and conditions, for example as part of a key terms summary, or do users have to scroll through pages of other, possibly irrelevant, terms in order to read the terms which are of most significance to them?Is the effect of these key terms clearly explained to customers?
Review the manner in which terms and conditions are presented to customers.Operators should consider how terms and conditions are notified to customers as part of the sign-up journey, as well as other “readability” factors such as brevity, structure, font size and spacing.
The full judgment can be accessed here.