Rishi Sunak’s closest parliamentary aide, Craig Williams, is understood to be the subject of an inquiry by the Gambling Commission after he bet £100 that there would be a July election, three days before the prime minister named the date. The revelation from the Guardian means Williams, who is standing again to be a Conservative MP in Montgomeryshire, will now face questions about what he knew and when. The story is embarrassing for the Tories but what are the rules on placing bets, who oversees them, and what are the potential punishments for anyone who is found to have had inside information? What is inside information? In finance, insider information refers to any fact that the wider world doesn’t know about and that could be used improperly for financial gain. For instance, if a senior employee at a company knows that their business is about to be taken over, they could buy shares, or encourage a family member to do so, in anticipation of making a profit. Insider trading is a criminal offence in every major economy. The betting world takes a similar approach. Regulations set by the Gambling Commission state that inside information is anything “known by an individual … as a result of their role in connection with an event and which is not in the public domain”. This applies to sports betting and also “activity related to a non-sporting event on which bets can be placed”. The Commission’s guidelines on misuse of inside information give examples, such as a TV talent show, a novelty market, or speculation about a change in personnel. Is the use of inside information illegal? If someone is investigated and found to have used inside information to bet, that may be deemed to be cheating – an activity about which the Gambling Act 2005, passed under Tony Blair’s Labour government, is very clear, according to experts. Section 42 of the act states that it is an offence to cheat at gambling, or to do anything that allows someone else to cheat. The definition of cheating is drawn quite widely. It includes “attempted deception or interference” related to the process by which gambling is conducted. This, according to gambling law experts, would include betting on an event when you already know the outcome. It makes no difference whether the bet ends up winning. Harry Stewart-Moore of Gardner Leader solicitors, who spoke before he was aware that Williams was the subject of the Gambling Commission’s probe, said the allegation was “very serious”, although any action would depend on the amount of money involved and what exactly was known to the individual when the bet was placed. What is the punishment? The Gambling Commission has the power to prosecute cheating offences, which carry a maximum prison sentence of two years and a fine. The regulator can also raid premises and seize data, such as digital messages. In practice, the enforcement of alleged breaches of betting and sporting integrity rules is often left in the hands of another regulatory body, such as the Football Association. The FA prohibits football players from betting outright and can ban them from playing. High-profile cases involving betting by sportspeople have included Brentford and England striker Ivan Toney, who admitted betting on matches in which he was playing and was banned for eight months. West Ham’s Lucas Paquetá is under investigation by the Football Association in relation to bets placed in Brazil on yellow cards awarded for fouls the player committed. He denies wrongdoing. How is cheating discovered? Most bets are on sport, so monitoring is largely done through the regulator’s sports betting integrity unit (SBIU), which deals with reports of “betting-related corruption”. The SBIU works with gambling companies, sports governing bodies and the police to identify and investigate suspicious betting patterns, such as a sudden flurry of wagers on an obscure fixture or a very specific outcome. Although the regulator’s attention is mostly on sport, it applies the same monitoring and enforcement processes to non-sporting events, through a separate team that works closely with the SBIU. Some people think the Gambling Commission isn’t up to the task. Last year, the Sports and Recreation Alliance and the Sports Betting Group, whose members include the FA and the England and Wales Cricket Board, told MPs on the culture, media and sport select committee that the regulator lacked the “resources, expertise and appetite” to pursue criminal investigations. What is the bookmakers’ role? Bookies frequently refuse or limit bets from anyone they think might win, even if the customer simply displays a talent for beating the odds. They have an even greater incentive to prevent and report suspected cheating. Most will screen customers they know are involved in sports, ranging from stablehands to racehorse owners and professional footballers. Major operators also carry lists of politically exposed persons (PEPs), whose betting activity might be flagged up automatically. Some also have a dedicated politics “trader”, who will calculate odds on political events and monitor bets on them. If the bookie suspects cheating, they must pass this information to the Gambling Commission, under the terms of their licence to operate in Great Britain. In recent years, the Gambling Commission has fined operators who failed to monitor PEPs properly. According to Stewart-Moore, the terms and conditions of a bet will probably allow the operator to void a wager they think was won by cheating. “I don’t think any bookmaker would knowingly take a bet from that person ever again,” he added. What about parliamentary rules? The code of conduct that applies to members of the House of Commons does not refer specifically to betting, whether on the date of a general election or anything else. However, it does prohibit “any action which would cause significant damage to the reputation and integrity of the House of Commons as a whole, or of its members generally”. MPs who breach the code can be forced to apologise, be suspended or be expelled from the House. Any MP convicted of a crime and imprisoned for more than a year is automatically disqualified from serving, under the Representation of the People Act 1981.