by Kaylen Moodley / Candidate Attorney / Mooney Ford Attorneys
In late December 2023, a short-lived betting game on Hollywood Bets’ online platform, “Betgames Instant Lucky 7”, set off a legal storm. What was meant to be a lottery-style game ended up exposing a fatal design flaw: players could place bets without paying for them. Within just over a week, punters collectively walked away with R13 million in winnings, despite never risking their own funds.
The Judgment in the case of Hollywood Sportsbook KwaZulu-Natal (Pty) Ltd v Capitec Bank Limited and Others (19/2024P) [2025] turned on a fundamental issue of law: in circumstances where a wager is devoid of both risk and consideration, can it properly be regarded as a valid bet?
THE GAME AND ITS FLAW
The game resembled a rapid-fire lottery, with draws every 30 seconds rather than weekly. Punters would pick numbers, decide how many times they would repeat across draws, and place their bets. Ordinarily, their accounts should have been debited before a bet was confirmed.
The defect, however, lay in the system’s failure to deduct the stake amounts. Punters could bet endlessly without payment yet still receive real winnings. One respondent, for example, deposited R 900.00 and, over four days, withdrew R 443,700.00
Once its monitoring system flagged unusual payouts, Hollywood Bets shut down the game. The company initially launched urgent Ex Parte Applications, in which it obtained orders freezing the respondents’ bank accounts and compelling the banks to disclose account details. Thereafter, it pursued repayment of the winnings, placing substantial reliance on its standard terms and conditions.
These terms explicitly prohibited the use of funds “credited in error” and declared all winnings from void bets as “refundable to Hollywood Bets on demand.”
The respondents advanced a straightforward defence. They contended that they had deposited their own funds into their accounts and had participated strictly within the framework of the game as it was presented to them. They further emphasised that they had no control over whether Hollywood Bets’ system deducted the requisite stake amounts.
They expressly denied any allegations of fraud, theft, or conspiracy. Instead, they asserted that they had suffered prejudice as a consequence of the interim orders: their bank accounts were frozen, debit orders were dishonoured, and negative credit bureau entries were recorded against them.
THE VALIDITY OF THE WAGERS
The Learned Judge analysed the fundamental requirements of a valid wager. At common law, these are threefold: consideration, risk, and prize. This framework aligns closely with the statutory definition of a gambling game under section 5 of the National Gambling Act 7 of 2004, which provides that a gambling game must be played “upon payment of any consideration, with the chance that the person playing might become entitled to, or receive, a pay-out; and the result might be determined by the skill of the player, the element of chance, or both.”
On the facts of this matter, two of these essential components were missing. No consideration was paid by the respondents because the system failed to deduct stakes, and therefore, no genuine risk of loss was incurred. Punters were effectively permitted to participate in the game for free while still obtaining pay-outs.
This placed their “winnings” outside both the common-law conception of a wager and the statutory definition of a gambling game in section 5 of the Act. The Learned Judge therefore concluded that the respondents’ winnings were not lawfully earned and had to be repaid to Hollywood Bets.
THE SCOPE OF INTERIM RELIEF
The court was, however, critical of the breadth of the interim orders initially granted. In particular, the freezing of all transactions on the respondents’ bank accounts, rather than limiting such restraint to the amounts in dispute, was found to have caused undue prejudice. Similarly, the direction that banks pay over funds without notice to account holders offended the audi alteram partem principle. The Learned Judge suggested that a more appropriate course would have been to preserve the status quo while affording respondents an opportunity to be heard.
CONCLUSION
The court accordingly confirmed the rule nisi against the Respondents, directing repayment of their winnings. While Hollywood Bets ultimately succeeded, the judgment serves as a cautionary precedent.
For companies, the decision highlights that although terms and conditions may provide contractual recourse, responsible system design remains essential. Courts will not shield an operator from the consequences of its own technical failures without due process.
For punters, the case illustrates that winnings obtained absent a valid wager cannot lawfully be retained. What may appear to be “easy money” can, in law, give rise to an obligation of restitution.
Photo by Henry Becker on Unsplash
