WHAT MAKES A SPREAD BET?
A spread bet with Sporting Index isn’t actually a bet at all – it’s technically a “contract for differences”.
Whilst you might think of a spread bet on a typical Sporting Index betting market – such as the total number of runs England will score in the first innings of their next test match – as a wager similar to a bet with a traditional bookmaker, in the eyes of the law its actually very different.
To start with, in the UK traditional (or “fixed-odds”) bookmakers are now licensed by the Gambling Commission, which was set up by the Gambling Act 2005. This piece of legislation explicitly states that sports spread betting is not betting at all – and therefore Sporting Index is strictly speaking not a bookmaker.
Instead Sporting Index is authorised and regulated in the UK by the Financial Services Authority (FSA) (see www.fsa.gov.uk). The FSA is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000, whose purpose is to regulate the financial services industry in the UK.
Technically speaking, a sport spread bet struck with Sporting Index is classified under UK law as a financial arrangement known as a “contract for differences”.
The FSA actually defines a spread bet as follows:
“a contract for differences that is a gaming contract, whether or not section 412 of the Act (Gaming contracts) applies to the contract; in this definition, "gaming" has the meaning given in the Gaming Act 1968, which is in summary: the playing of a game of chance for winnings in money or money's worth, whether any person playing the game is at risk of losing any money or money's worth or not.”
In non-legal speak, a contract for differences is an agreement between two parties, buyer and seller, stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at a later contract time. Should the difference be negative at contract time, then of course the buyer coughs up instead to the seller!
Contract for Differences (or CFDs as they are often known as) are increasingly popular in global trading because they are a derivative that allows investors to speculate on, for example, share price movements, without the need for ownership of the underlying shares. They allow financial traders both to get speculative profit and to hedge their investment portfolios in case they are unprofitable.
Sporting Index have been trading CFD’s in sports spread betting since 1992 – which is when the company set up in London as the world’s first dedicated sports spread betting business.
The FSA imposes a strict regime on its licensees, including Sporting Index. Exacting “know your client” requirements and segregated client funds are just two examples of the FSA’s rules that Sporting Index adheres to meticulously. The FSA also rightly insist on the risk warnings you might have noticed in all Sporting Index’s advertisements, promotions and online website.
So when you trade with Sporting Index (whether via telephone, mobile or online betting) you can be sure you are doing so with one of the industry’s most reputable companies. In fact, you’re not having a bet at all – rather a sporting CFD!!
