Election date betting scandal: misusing inside information to deliberately gain an 'objectively improper advantage' is criminal

Last Friday a YouGov poll revealed 53 per cent of Britons believe that anyone found guilty of using inside knowledge to bet on the date of the next UK General Election should "definitely face criminal prosecution", while another 24 per cent say that should "probably" be the case. 

The 'Gamblegate' scandal erupted around allegations that key members of the Conservative Party hierarchy – including two high-ranking campaign staff and two prospective parliamentary candidates – placed bets on the election taking place in July.

The case has at times eclipsed reporting on the election campaign itself, with successive government ministers attempting to hold the line that the Gambling Commission should be given space and time to properly investigate, while Labour's campaign chief Pat McFadden wrote to commission chief executive Andrew Rhodes on Sunday demanding he reveal the names of any other people currently under investigation "as a matter of public interest".

New Statesman senior editor George Eaton said of the betting scandal this week: "It's a disaster for Rishi Sunak and, along with his early exit from the D-Day commemoration, this is what voters will remember most from the campaign."

Readers will need little reminding of how seriously racing takes the issue of profiting from inside knowledge and, in common with other sports, plenty of effort is expended in educating those coming into the industry through the racing schools as to what their responsibilities are when it comes to privileged information. 

But how well known are the provisions of the 2005 Gambling Act when it comes to betting on politics, and which organisations within the political parties and at Westminster are charged with policing this area? 

Kate Bedford is professor of law and political economy at the University of Birmingham and has written extensively on issues surrounding the gambling sector. 

"I think that the law is quite clear here," said Bedford. "Misusing inside information to deliberately gain an 'objectively improper advantage' – ie knowing the outcome ahead of time and then betting on that outcome – constitutes cheating at gambling, and cheating at gambling is a criminal offence under section 42 of the Gambling Act." 

In a 2018 policy paper the Gambling Commission detailed a six-stage spectrum on which it judges the severity of misuse of information, where one is categorised as 'research or finding out information' and six is 'manipulation of the event' such as match or race-fixing.

Bedford added: "I think the most relevant section of that spectrum here is stage four, which covers restricted information. This is information which the individual has gained because of their role in connection with the sport or event; or because of a close association with an individual with such a connection. This information is then used for financial gain or passed on to a third party. 

"The policy document says the Gambling Commission would have 'concerns' in that area but, in most cases, the appropriate form of sanction would be through either the sports body or the employer, combined with the betting operator refusing the bet. The commission may also use its own powers to void the bet. 

"That would suggest that the commission would be very unlikely to use its power to take forward prosecution for that level of misuse of information."

If the Crown Prosecution Service seems unlikely to be called in – the commission would countenance a criminal prosecution only if it wished to create a legal precedent – the question is which bodies in the political world have the powers to police politicians and political operatives in the area of betting, analogous to the BHA's regulatory powers over racing's workforce.

When it comes to potential avenues for punishing anyone found to have breached the law, Bedford points to both the internal disciplinary procedures within the political parties themselves, and the House of Commons code of conduct.

John Major: established the Committee on Standards in Public Life in 1994Credit: The Times

Rule 7 of the code of conduct states: "Members must only use information which they have received in confidence in the course of their parliamentary activities in connection with those activities, and never for other purposes." 

As has been demonstrated on several occasions during the current parliament, the power of suspension from the House of Commons can trigger the political downfall of an individual. 

But Bedford places most faith in the Committee on Standards in Public Life, which was set up in 1994 by prime minister John Major and which established seven principles of public life, often referred to as the Nolan Principles. 

"I really see the case for the Committee on Standards in Public Life – which is cross-party – to work more closely with the Gambling Commission and sports governing bodies to learn lessons about preventing and punishing cheating in political betting," said Bedford. 

"That might involve basic education – as happens in racing and other sports – as to what misuse of information is, and going through the Gambling Act provisions in relation to cheating. But there’s also a penalties piece, which other sports governing bodies have." 

So what is the material difference between what those close to the decision to call the election on July 4 are alleged to have done (and, in the case of Craig Mitchell MP,  already admitted to), and flying a drone over a racecourse, or hiring a hospitality suite, to have more rapid access to knowledge about what is happening during a race than is the case for bettors watching on television?

"I think that would be paying for publicly available information earlier, but it’s not secret information if a horse falls," said Bedford. "You’re paying for faster information than others would have. I’m not saying it's moral or ethical, but that’s the way I would see it within the Gambling Commission’s spectrum."

For anyone wishing to report an abuse of privileged information in horseracing, or any other integrity or welfare issues, go to the BHA's RaceWISE microsite

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