Do Exclusions Of Liability Work Online? Online Gambling Operator Ordered To Pay '1.7m Winnings Despite 'Glitch'

Publication Date17 May 2021
SubjectCorporate/Commercial Law, Consumer Protection, Media, Telecoms, IT, Entertainment, Corporate and Company Law, Contracts and Commercial Law, Consumer Law, Gaming
Law FirmMayer Brown
AuthorMr Oliver Yaros, Ondrej Hajda, Mark A. Prinsley, Valerie Vanryckeghem, Reece Randall and Ellen Hepworth

On 7 April 2021, the UK High Court granted summary judgment to a claimant, Mr Green, who sought to recover his winnings of over £1.7m from Petfre (Gibraltar) Ltd (trading as "Betfred"), an online gambling company that had argued he won a game in error as a result of an in-game glitch. Betfred have said they will not appeal the decision (available here).

In an important ruling for the providers of online services, platforms and other solutions, the UK High Court ruled that:

  • The contract terms that apply to users online activities may be determined and formed at the point of the provision of the relevant service to the user, rather than at the point the user signs up and creates their account; and
  • Exclusion clauses typically found in standard form online service terms, end user licence or other "click wrap" agreements may not be enough to exclude a provider's liability for errors caused by malfunctions of the service.

In this ruling, the UK High Court examined some of the basic principles of contract law in the light of the provision of an online service, including the offer and acceptance of terms and conditions, interpretation of exclusion clauses, and the incorporation of standard terms into contracts. In particular, it serves as a reminder that terms and conditions for online services must be accessible, with any onerous clauses highlighted to consumers in an obvious way.

Background

Mr Green had won 'chips' worth £1.7m in an online game called Magic 7 Blackjack, having won the jackpot for this game three times over a period of several hours. Upon winning, Mr Green had taken a screenshot showing the number of chips in his account but was not able to withdraw any money.

Betfred had stated that in usual gameplay the likelihood of winning the jackpot once was only 0.00018361% and that the level of success achieved by Mr Green occurred because of a 'glitch' in the game. Detailed technical evidence about the glitch was not heard as part of the application for summary judgement, but Betfred claimed that a third party provider of the game had advised Betfred that a glitch had occurred and that Betfred should not pay out.

Arguments

Mr Green's case was that the terms and conditions he accepted several years ago when creating his account say that '"Customers may withdraw funds from their account at any time providing all payments have been confirmed." The Gambling Act 2005 sets out that a contract if formed between the relevant parties where remote gambling takes...

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