Winner-Toto runs the Israel national football pools and is entrusted with the management of sports betting in Israel. It is an organization with a clear business orientation.
In recent months, Winner-Toto has undergone a marketing revolution with the intention to reposition itself as a major business player in the market, which makes a significant contribution to the community by promoting recreational and sports activities, as well as improve the people’s quality of life. Over the past decade, Winner-Toto has placed about NIS 3 billion at the disposal of Israel Sports.
The Winner Toto website has been redesigned and constitutes 8% of total income. Winner Toto have signed marketing and business agreements with basketball and football bodies. Winner Toto is a member of the EFP – European Football Pool for promoting sports activities in cooperation with the Union of European Football Associations (UEFA). Winner-Toto’s CEO is a member of EFP’s Managing Committee.
Under legislation from 1967, Winner-Toto has sole rights to organize sports betting in Israel, and the profits earned are dedicated to the advancement of sport. There are, however, not enough matches played locally through the year for Winner Toto to rely on local fixtures. Instead, they select fixtures from the English and Scottish leagues.
The football pools are big business, bringing in huge revenues. Via their marketing subsidiary, the UK leagues sued Council for Organizing Gambling on Sports” (Winner Toto) for revenues, claiming Copyright Infringement and Unjust Enrichment. Losing in the District Court, they appealed to the Supreme Court.
On 14 March 2010, in Appeal 8485/08 the Supreme Court found in favor of the Council for Organizing Gambling on Sports against the FA Premier League LTD., the Football League LTD. the Scottish Premier League LTD., the Scottish Football League and Football DataCo. their licensing company, ruling that since the fixtures were the result of a fairly simple algorithm and matches are presented in chronological order of play-offs, with consecutive matches arranged alphabetically, the data is not copyright protected, since it lacks minimal creativity, although there is no doubt that arranging the league and the fixtures does require a large amount of work.
Having established that there is no copyright protection, the Court went on to rule that there is no basis for a remedy under the doctrine of unjust enrichment. Citing Justice Englard in the infamous A.Sh.I.R. decision 5768/94 , the Court held that in cases where there are no Intellectual Property rights, unjust enrichment is only applicable if there is a clear case of bad faith. Here, since by Law Winner Toto has a monopoly, there is no grounds to see unfair competition as there is no competition.
I believe the Court’s logic here is fundamentally flawed. the doctrine of Unjust Enrichment is supposed to cover cases of free-riding where there are no statutory IP rights. In the A.Sh.I.R. decision, the Supreme Court upheld a Tel Aviv District Court decision to provide a remedy where the plaintiffs had not registered their IP rights. Though failing to register their designs and obtain statutory protection, because of blatant inequitable behavior by the defendants, the plaintiffs were, nevertheless, awarded damages.
In the present case, the Supreme Court have established that there is no copyright in the fixtures, so there is no IP infringement. However, the football leagues were not negligent in registering their IP rights, since copyright does not require registration and the fixtures are anyway not copyright protected since the Supreme Court considers that the playoffs are the result of an algorithm applied to data from a database. In such a scenario, there is unjust enrichment since organizations such as Winner Toto free-ride on the leagues, who spend a fortune organizing and promoting the matches, which is big business.
The fact raised by the defendants and upheld by the court, that the Winner Toto score draws raise interest in the UK league and thereby increases TV broadcasting revenue is not relevant. It is up to the league to decide whether to allow their fixtures to be exploited in this way, regardless of whether third parties feel that their activities are positive to the league. Similarly, statements by the court that providing revenue to the UK leagues without them doing anything to merit it, would be unjust enrichment on their part is not the case.
Winner Toto can bet on anything not predictable, certainly any sport and any league, from little league basket-ball in the Galillee to camel racing in Dubai. They choose to bet on British football matches. They should, therefore, cut the UK leagues into the profits.
The court made a big issue out of the fact that Toto had a statutory monopoly, claiming that there is therefore no competition, and thus no unfair competition. Whereas there may be justification for a nanny state to regulate gambling industries, there is no real justification other than purely financial to maintain a legal monopoly, and this should be sufficient inequitable behavior to grant damages to the fixture arrangers, were that required for unjust enrichment. Toto awards about 50% of income in prizes. It will be appreciated that bookmakers in a competitive market, make rather less.
In the current situation, Toto has a legalized monopoly for sports gambling and advertises itself on Channel One which is allegedly advertising free, and supported with licenses. Profits raised are ploughed into supporting sports facilities in Israel.
Founded in 1923, the Littlewoods Pool had some 10,000,000 players prior to the launch of the National Lottery in the UK. By 2008, the number had dropped to a mere 700,000. then the pools went onto the Internet and attracted worldwide interest. The New Football Pools are available online on the Internet and can be played from Israel. See http://www.footballpools.com The pools are partners with the English and Scottish leagues.
Winner Toto partners other leagues but not the Scottish and English football leagues. They do, however bet on results of UK games. This drives gamblers from betting on the football pools on-line, and thus adversely affects football league revenue. This is unfair competition and is inequitable behaviour since Winner Toto uses UK fixtures to raise interest in sport gambling and invests the winnings in supporting local sports and not British Football. This is unjust enrichment. Allowing advertising for Winner Toto and only for Winner Toto on State television and radio is a further example of unjust enrichment. Although occasionally, UK football benefits from Israeli players, is there not unjust enrichment by gambling on a league arranged by one entity in one country to raise funds for another country?
Since the Basic Law of Freedom of Occupation was passed in 1980 and the Supreme Court interpreted it as providing fundamental rights to allow anyone to engage in any business, preventing Vernons, Littlewoods, William Hill or Ladbrokes or other UK bookmakers from offering gambling services in Israel is in itself illegal discrimination. Whilst accepting the public interest in regulating the betting industry, that does not mean that the government should have a monopoly to that industry.
The leagues have no legal rights in the fixture listings or the results of the games as these are mere facts. So anyone is free to make however money they can from these and doesn’t owe anything back, as long as no other laws are broken or rights infringed.
As you say you can set up bets over any collection of unpredictable facts. If I organize a bet over Lufthansa flight delays, do I owe them a share of my revenue?
By this logic sports newspapers should be paying every league and event they cover as what they do is just the same – use the facts of the event to make a product they charge money for. And the newspaper should pay every business, organization or government it covers for the exact same reason – using the facts generated by their normal operation for profit. Yes, it’s absurd, and so is asking bet organizers to pay for essentially the same use.
Uri,
Your comments are to the point. However, in Israel Law, there is a doctrine of Unjust Enrichment. Reporting sports results is one thing, but there would not be football pools without the league. This is a form of commercial sponsorship. It is not different from making copies of footballer’s shirts, braodcasting league matches, etc. Football pool promoters DO enter into commercial negotiations with the league organizers in the UK. Toto does sponsor the football matches here. Betting on UK leagues and not paying is free riding. In my opinion this is unjust enrichment. There IS a law about unjust enrichment. It is fair grounds for damages.
So happy to read such a insightful article that does not depend on cheap rhetoric to get the point across. Thank you for a great read.
Very impressive.Keep going like that!!!!!!!!!!
Someone I work with visits your blog frequently and recommended it to me to read too. The writing style is great and the content is interesting. Thanks for the insight you provide the readers!
Nicely written and thanks for this interesting post. Do you write posts yourself or do you outsource?
All my own work. typos and all.
Many thanks for clarifying this issue.