A ruling made last month by the Court of Session shows that betting does not always pay, even when the outcome you wagered on is realised, writes Emma Boffey.

The case centred on a bet made by 72-year-old Glaswegian Albert Kinloch. He placed a £100 bet with Coral Racing Limited at 2,500/1 odds on Rangers Football Club being relegated from the Scottish Premier League (SPL) in the 2011/12 season.

While the Ibrox club finished second in the SPL table that season, it was stripped of its place in Scotland’s top league as a result of its owner and operator entering administration.

Mr Kinloch, himself a retired bookmaker, placed his bet with Coral in September 2011.

During last month’s hearing, he told the Court of Session that he made the wager after becoming aware of Rangers’ financial troubles, which were well-publicised at the time, suspecting these could result in its removal from the SPL, in accordance with the league’s rules.

After eight top tier clubs refused to approve Rangers’ SPL share sale, the Glasgow club found itself ineligible to continue playing in the league. Following the sale of assets by administrators, Rangers then reformed as a new company and successfully applied to join the Scottish Football League’s third division. Four seasons later, the club is back in the top flight.

Coral argued the bet should not be honoured as the club was not relegated at the end of 2011/2012 season – rather it was liquidated as a result of its financial difficulties.

The key question for the court to determine in this case was what the words on Albert Kinloch’s betting slip, “From SPL - Rangers to be relegated,” actually meant.

He contended that the bet was won when the club had to move to a lower league. Coral maintained the words should only apply to the club dropping out of the SPL due to its performance (or lack of it) on the pitch and falling from the top tier due to lack of points, as stated within league rules.

The court agreed with Coral. It found that the traditional dictionary definition of ‘relegation’ did not adequately describe what had happened to Rangers which, it decided, had ended up in the third division by virtue of entry into a contract rather than by a result of its performances on the pitch that season.

The court held that, in interpreting a bet in any particular sport, the court can have regard to the rules of its governing body – in this case, the SPL. The court used the SPL rules to give the betting slip’s words context and noted that merely using the dictionary definition of ‘relegated’ was not enough and that commercial common sense needed to apply. It would, the court stated, otherwise make it impossible for betting businesses to function if they were unable to offer terms within the rules of a particular sport.

This ruling found that the odds of 2500/1 for “Rangers to be relegated” from the SPL were offered by Coral on the basis that it was highly unlikely that the club would have failed to secure enough points in the league table in the 2011/12 season to maintain its place in the league.

While Mr Kinloch was unsuccessful, there has been a sea change in how Scottish law perceives betting. Until the introduction of the Gambling Act 2005, gambling contracts were unenforceable in Scotland. That legislation has resulted in the potential for cases, such as this one, to be enforced through the courts – even if the result doesn’t always go in favour of the punter.

The case is also a further confirmation from the Scottish courts that, when interpreting ambiguous contracts, they will seek to apply a commercial common sense approach, construing words in light of their ordinary meaning and crucially, for this case, in their proper context.

In this instance the court has held that the context for betting contracts includes the rules of the sport in question, a decision which will be welcomed by bookmakers.

For Albert Kinloch and his backers at the Scottish Legal Aid Board, it marks the end of the road in his pursuit for a £250,000 pay-out on his disputed Rangers ‘relegation’ bet – for now, pending any appeal.