Wednesday, September 28, 2016

Gambling and the Law

The late action about baccarat has raised once more the questions whether gambling is wrong, and in what light it ought to be regarded by the law—questions on which the opinion of the world at large appears to be even worse informed than it usually is. These questions, indeed, are incapable of being solved without a greater grasp of moral principles than is at all common; for in order to solve them it is necessary to have distinct and reasonable notions both of morals and of law, and of the relation between the two, and such knowledge is very rare. The question Is gambling wrong, and why? is continually asked by people who tacitly assume that every action or omission whatever is found in one of two schedules respectively headed ‘right ’ and ‘wrong,’ and that the question in all cases is in which of these the given act is specified. Of course no such schedule ever was attempted to be made, but the conception of it haunts the people’s mind. A striking form of the kind of morality which it implies is to be found in the complaint that a man might keep both in letter and in spirit every one of the Ten Commandments, and yet be devoted to gambling and pass his time in the wanton indulgence of cruelty to animals. It might be said in the same spirit that only one form of falsehood is forbidden by a code which forbids bearing false witness against your neighbour, but permits false witness in his favour, and that the great duty of obeying lawful authority is at most obscurely and in-directly intimated by an injunction to honour one’s father and mother.

These criticisms upon such a document as the Ten Commandments throw little light upon the moral foundations of the horror of gambling, which is pretty widely spread, though it is not very wisely applied ; but in order to make it reasonable, and in order to decide how far it is to be embodied in the law, it is necessary to go deeper and to determine the principle on which gambling is morally objectionable—this alone can form a steady foundation for the course which the law should take upon the subject.

The principle appears to me to be perfectly simple, and not very difficult to apply. It is that gambling, like any other thing, is a question of degree. A bet for one man is unobjectionable if it is a matter of shillings, for another man it may be of no harm if it is a matter of pounds, but questions of degree of this sort must by the very nature of things be decided by the people whom they actually affect—a man must decide for himself how much he can afford to lose, and if he is wise he will not exceed his limit; but, though this may be a guide to the amount of his bet, it can hardly determine its legal quality. Is money lost by gambling to be a real debt recoverable by law, or is it to be merely a debt of honour? After various hesitations it has been decided that it is to be a debt of honour only. This was finally settled by the Act of 1845 (8 and 9 Vict. c.109, s.18), which enacted that all contracts or agreements, whether by parole or in writing, by way of gaming or wagering should be null and void. Up to that time wagers not against morality, decency, and sound policy were good, and a wager was defined to be a contract entered into without fraud for a good consideration, and upon mutual promises to pay a stipulated sum, or deliver some other thing to each other, according as was prefixed, if an equally uncertain contingency should happen within the time upon which the contract was made. The wisdom of the enactment of 1845 cannot be questioned on a great variety of grounds, but, as will be presently seen, it did not render betting in itself illegal or declare it to be void on the ground that it was contrary to public policy. It thus left a loophole at which the practice was permitted to continue, and in some cases to be enforceable legally. During my own career as a judge, I had not unfrequent occasions to notice this, and I do not think that the legislature will have done its utmost to discourage what practically is vice while that can be said.

In order to explain this it is necessary to call attention to several recent decisions of the Court which show how the matter stands. The first of these is Read v. Anderson, decided in 1884 and followed in more recent cases.

Read v. Anderson (13 Q.B.D. N.779) was originally tried by Sir H. Hawkins without a jury in 1882 (10 Q.B.D. 100). The plaintiff was a licensed victualler at South Shields, and the defendant a turf commission agent. The defendant made bets for the plaintiff on which the plaintiff had to pay £714 3s. 1d.; the plaintiff revoked the defendant’s authority to pay, but he paid the amount under fear of being made a defaulter at Tattersall’s, the consequences of which would have been serious to him.

It was held by Sir H. Hawkins, and he was confirmed on appeal by the Court of Appeal (the Master of the Rolls being overruled by Lord Justices Bowen and Fry), that in such a case the principal had no power to countermand his agent’s authority to pay.

The practical effect of this was that a man who makes a bet through an agent is bound by it as soon as it is made. This is a very great abridgment of the Act of 1845, for it regulates and gives a legal footing to bets made in the commonest of all ways. Its effect upon the existing law may be estimated by introducing the effect of it in express words. The Act so altered would run as follows:—‘All contracts by way of gaming or wagering shall be null and void provided ‘that if any such contract is made by an agent the power of the principal to revoke the agent’s authority to pay shall determine as soon as the bet is made.’

It is important in considering the judgments of the Court of Appeal to see how they came to open a back door to the repeal of ‘the Statute, or at least to its practical nullification. The whole argument of Lord Justice Bowen (with which Lord Justice Fry contented himself with agreeing) tacitly assumes that this case was one to which the ordinary principles of business agency apply. He says: ‘It will not be denied that if a principal employs an agent to do something which by law involves the agent in a legal liability, the principal cannot draw back and leave the agent to bear the liability at his own expense. This is, of course, true, but it is not the case here, because the payment of bets cannot be enforced by law. I think the true way of applying this to the present case would be by saying the plaintiff cannot recover.’

The Lord Justice says, however—‘but by the usage of his business known to both parties at the time of his employment, and with reference to which usage the contract of employment was made, the betting agent became liable, as a matter of business, to make good a lost bet at the risk of losing his character and customers? In other words, the employer must pay his bets in order to protect the character of the betting agent.’ This is the same as saying, in other words, ‘The law is too hard on betting agents—explain it away.’

This principle has been followed in other cases. In the cases of Seymour v. Bridge (14 Q.B.D. 460) and Percy v. Barnett (l5 Q.B.D. 388) it was held that the broker was or was not entitled to recover for his customer according as the customer was or was not acquainted with the practice of the Stock Exchange to overlook the violation by brokers of what is known as Leeman’s Act, 30 and 31 Vict. c.29, which was passed in order to prevent contracts for the sale of shares in Joint Stock Banks of which the sellers were not possessed, or over which they had no power.

These cases, however, and some others which might be mentioned, I do not touch on, as they have no immediate connection with the matter immediately in hand.

This part of what I have to say on the present matter may accordingly be fitly concluded with this observation. Parliament will not have done what it practically can to discourage gambling and bets, until it has condemned it in general terms, which it would be perfectly easy to do, by reciting that, whereas gambling is a practice opposed to the public interests, it is hereby declared to be illegal, and all bets, whether made by agents or between principals, and all contracts ancillary to gambling, shall be void, and if made by an agent the principal may revoke his authority to pay the bet at any time whatever.

Would there be anything in such an enactment which could constitute any grievance in any case?

In the first place it may be observed that from 1541 a long series of Acts had been passed making games of chance illegal. They fill thirty pages in Chitty’s Statutes, from 33 Henry VIII. c.9, an Act for the maintaining Artillery and the debarring of unlawful games (which seems to have been intended to prohibit all amusements except archery), to 8 and 9 Vict. above quoted, which made wagers void, and provided that cheating at cards should be punishable as an act of obtaining money or goods by false pretences, and established some rules of evidence to facilitate the suppression of gaming-houses, all these levelled against different forms of gambling.

Why, then, should it be supposed that the introduction of a mere generality rendering all betting illegal should injure anybody? It would, in fact, pass hardly observed as a piece of Parliamentary verbiage, except by a few lawyers, and, indeed, they would hardly pay attention to it till cases came to be argued and particular expressions to be carefully scanned.

Nobody proposes to give legal effect to wagers, but till that is proposed the making of bets illegal instead of being as at present merely void will make no practical difference of which anyone need ever be aware. If a man won ten thousand pounds on the Derby, his chance of being paid would be just as good or as bad as it is at present, whether his act was illegal or not. As to bets made by agents, is it imaginable that people should be willing that the principals should be disappointed of their winnings if agents pleased to avail themselves of the law of the land, but that a loser should be obliged to pay in order to keep up the credit of the agent through whom the bet was made?

The existence of such a person as a betting agent appears to me to be an insult to the law. It is a mere abuse that such a person should exist at all; and a fragment of legislation which enables him to carry on his business, and for which no excuse is proposed except that it does so enable him, is in itself absurd. It is impossible to prove more clearly that it exists in defiance of the general body of the law. Lord Justice Bowen assumes in Read v. Anderson that a betting agent is entitled to be regarded as is a legitimate agent in any other branch of trade; it is, in fact, no more than a petitio principii. If the statute had been supposed to leave a loophole open for bets made through agents, the loophole would certainly have been closed. When the large door was closed for the eats a small one would not have been left open for the kittens if it had been noticed. The fact is that the sort of betting which is most common and most mischievous is usually done through agents. As matters stand, a. betting agent has the advantage of enabling anyone to bet to anyone who lives in a moderately large town. In these days every shop-boy can obtain the odds and consult every petty little tout about them, and the betting agent can bet for him at a very small price. In Read v. Anderson (Q.B.D. 103) it appeared that the plaintiff made over sixty bets for the defendant on the Wokingham Handicap, on which the defendant lost £1,490. 0s. 5d., and won £705. 178s. 5d. The parties apparently were drapers living respectively in London and South Shields, and their correspondence turned upon the Jockey Club rules of racing, and the rules of Tattersall’s Room. This shows the length to which such agencies go, and the extent to which betting is encouraged by it. It is practically certain that a greater blow at their credit could hardly be given than would be inflicted by a measure which would deprive them of all legal protection and recognition.

It is by no means easy, for these reasons, to see who would have any legitimate interest in opposing the modifications which I suggest in the law as it stands at present. Nothing can be less satisfactory than a set of rules which no one is interested in maintaining. In order to do so a case must be shown in which from motives of general convenience some serious kind of business is habitually conducted by gambling in the full sense of the word. I think it would be impossible to give a single instance in which this can be asserted to exist. In the first place, there is no exception at all (except a small temporary one) in Act 8 and 9 Vict. c.109, s.18,which goes to show that none was needed; in the next place, what exception would be required?

A general notion exists and is warranted by popular language that gambling has been, and is, practised on the Stock Exchange, especially by means of what are commonly called ‘time bargains.’ If A sells to B £100. in the funds at the price of the day, and engages to accept from B a month hence £100. at the price of that day, that is said to be a case of a bet on the comparative price of the funds on this day or this day month, and it may be settled without any real sale at all, but by the payment by the loser to the winner of the difference between the two prices. This practice was prohibited in strong language in 1738 by 8 Geo. II. c.8, ‘an Act to prevent the infamous practice of stock-jobbing,’ but it has been decided (Thacker & Hardy, 4 CB. 685) that in the present day such a contract is not void, and is not affected by the Act of 8 and 9 Vict. c.109, s.18. Mr. Justice Lindley said in his judgment, which was affirmed on appeal, that ‘there are no such things as time bargains on the Stock Exchange,’ such bargains being at least of very rare occurrence.

For these reasons I do not think that any risk would be run by the slight modifications in the existing law which I propose that would make all betting void, and leave the payment of wagers to the honour of those who made them.

There is one point of view in the recent baccarat case which has possibly appealed forcibly to the people at large, though with no great claim to reason upon the part of those who make the appeal. It is occasionally said that the law as it stands exhibits practical partiality in the odious form of undue lenity to the rich in comparison with the poor. How can it be just, it is said, that the Prince of Wales and other people of the highest rank should go to Mr. Wilson’s house and play baccarat with impunity, whilst the news-papers are continually filled with accounts of raids upon gambling-houses which do not do a tenth part of the harm that is done by Mr. Wilson’s house? The answer, of course, is plain. There is all the difference in the world between keeping a house in which every one may gamble and private gambling which no one can share in without a special invitation. It would be a monstrous invasion of privacy if the police were able to get a warrant to enter a private house on the ground that there was reason to believe that cards would be played there, and to arrest every one who was suspected of playing.. True as this answer is, it is very unwise to rest the defence of private habits upon a ground which involves an admission that they would be criminal if practised in public.

It may be a question whether, as matters go, too much indulgence is not shown to notorious gamblers who carry on their practices in public. It is true that under 36 & 37 Vict. c.38, s.3, a man who plays or bets in any street, road, highway. or other open and public place to which the public have, or are permitted to have, access, with any cards or instruments of gaming, or any coin, cash, token, or other articles used as an instrument of such wagering or gaming, is a rogue and vagabond, and as such may be imprisoned by a magistrate for three months; but though at most great racecourses this offence is frequently committed with every sort of impudence and impunity, it is not properly punished, as the police are not instructed to apprehend the offenders as they certainly ought to be.

Upon the whole, I think that nothing beyond the slight modification above suggested could be done by way of addition to the law relating to gambling except a remedy which, if it were efficient, would be worse than the disease.

The Nineteenth Century, July 1891.

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