What are the rules on insider betting, really?

There are no specific laws against "insider betting" in the UK; the 2005 Gambling Act updated the 1845 offence of "cheating" but left the term undefined. This contrasts with financial market insider dealing, which, while not a common law offense, has robust regulations. The article points out that while insider dealing laws protect retail investors from large financial institutions, applying the same principle to gambling seems to disadvantage sharp bettors who might have an edge over bookmakers.

The author, Dan Davies, a managing director at Frontline Analysts, questions why the betting industry receives such aggressive regulatory protection, especially given the historical "caveat emptor" principle in British gambling. He suggests that the primary reason for regulating insider trading in financial markets was to encourage mass participation in investment, a public interest that doesn't clearly extend to encouraging wider participation in gambling.

The Gambling Commission's 2018 position paper, which is difficult to locate, outlines its approach to using investigatory powers, primarily focusing on sports governing bodies for enforcement. However, there is no such governing body for political betting or reality television. The article questions whether criminal law should be the fallback option in these cases or if bookmakers should simply stop offering markets on such events. Davies suggests that bookmakers should accept informed punters as part of the cost of doing business, especially since they can use this information to their advantage.

The author argues that "insider trading" is a market crime, not inherently against natural justice, unlike stealing. He points out that the amounts of money involved in insider betting are often trivial, and questions the justification for sending someone to prison for being better informed. The article concludes by highlighting that betting markets on political events offer minimal benefits to the political system, and questions the public interest in such aggressive regulation for the gambling industry.