Gambling with ‘Pooled Funds’, the Syndicate vs. the Limited Liability Company,

Strictly speaking, gambling with other people’s money is verboten in the UK. The one exception it  seems was carved out for pooled funds laid within the National lottery (See, https:// www.gamblingcommission.gov.uk/public-and-players/guide/running-a-lottery-syndicate). But  even in the case of a lottery syndicate the question remains as to whether a syndicate requires a  license to operate. 

In the past and for most punters, betting with pooled funds while not kosher was not seen as an  issue unless there was a dispute between the gamblers and their benefactors. Whereas today, all  online gambling providers require proof of source of funds and in particular that the gambler is  using his or her own money. Using pooled funds through a syndicate therefore creates serious  obstacles and risk to both professional traders and their investors.  

For serious professionals the use of a syndicate had been the most popular and was seen as the  go-to structure for larger professional teams using pooled funds. While the loophole appears to  be clearer for syndicates betting in the National Lottery, it is simply not available in other betting  markets and will violate the terms and conditions with any licensed operator.  

So using a syndicate leads to void bets.  

The use of the syndicate structure is simple and presents little or no expense. However, it does  not afford the gambler betting with other people’s money or their benefactors the protection they  may expect or wish to have. In fact, such a structure would likely be illegal and would create  further risks for both the gambler placing the bets as well as the investors who provided the  funds. 

There is though one method that gamblers and their investors can and do use to pool resources  around talented professionals that passes muster—the limited liability company.  

While forming a company and administering it may seem a daunting task, it is relatively straight  forward, inexpensive and provides both professional punters and their investors the protections  and security they desire.  

Companies are tried and true mechanisms for investments and provide the gambling investor the  protections granted to shareholders so that their investment is both transparent and recorded.  The professional gambler trading through a company structure is afforded legal status to trade  and may enter contracts with betting market providers and gain access to banking services.  

Simply put, a company that gambles can gain all the benefits of a professional organization that  may have seemed beyond reach for the gambling professional or investor. 

Should you have the interest and inclination to explore the opportunity in more depth, we are  happy to have a preliminary conversation about the benefits of a company setup for your trading  business, project or prospective investment opportunity, for further information email info@sportstradingnetwork.com