Sam found himself getting sucked deeper and deeper in to betting, sometimes risking £11,000 in a day. Now a judge has ruled he was unlawfully targeted. At 1.17pm on 15 August 2018, Sam* logged in to his online betting account and gambled five days’ worth of wages. Already deep in debt – having taken out 13 loans over three years, and with his marriage under strain – he had been desperate to quit.

But Sky Betting & Gaming, operator of Sky Bet, Casino, and Vegas, had other ideas. Having labelled him a “high value” customer, and not realising he was at risk, it had sent him an email promising a £100 bonus if he spent £400 on a casino game. “Well done on making it past level 2. Can you make it even further this week?” it said. Soon after receiving it, Sam deposited £400. At first glance, the promotion looked like any old junk email. Instead, it was the product of a sophisticated targeted marketing campaign based on hundreds of thousands of pieces of data used to profile him, predict his behaviour – and serve him personalised ads.

Over two years, when his gambling problem was at its height, the Sky Bet group emailed him multiple times a day, with staggering success. Internal records suggest that of the 1,389 emails it sent him offering free spins and bonus prizes, Sam engaged with 98% of them. “I wasn’t able to ignore them. They had this grip on me,” he said. In a landmark legal ruling that could have wide-ranging ramifications for the gambling industry, the high court has now ruled the targeting unlawful. While Sam may not have explicitly opted out, he had been gambling compulsively, and was in no state to consent to the use of his data for profiling and targeted marketing, the judge said.

Mrs Justice Collins Rice said Sam had “wanted” to be sent promotional offers, even “craved” them, desperate to clinch the “big win that would turn his life around”. But his life was falling apart: he had lied to his wife, contemplated suicide and was facing “financial armageddon”. He “was not making decisions … on a fully autonomous basis at all”. Sky Betting & Gaming says it “fundamentally disagrees” with the judgment and is considering an appeal. “Protecting our customers is the number one priority,” it said.

Now, as the wider gambling industry faces mounting scrutiny – and amid calls for regulators to intervene – the Observer can reveal the inner workings of the Sky Bet group’s “black box”: how it and its partners gathered 2,400 spreadsheets of data about a vulnerable customer, from his disordered spending habits to the exact times he played specific games, and used it to predict his behaviour and create marketing that was “hard to resist”.

Despite all the information they had access to about Sam – from location and deprivation data to the fact he’d closed and reopened his account – the company failed to identify him as someone in need of help. Instead, he was coded as a “high value customer” – a prime target for more marketing. And when he did eventually stop gambling, the software labelled him as someone to “win back”.

Sam, who is sharing his story on the condition of anonymity, was 21 when he gambled for the first time. It was April 2009 and he’d seen a newspaper ad offering a free football bet. “More or less straight away” he was hooked. He quickly graduated from £10 and £20 football bets to spending hundreds, then thousands, on racing, slot machines and online casinos. Soon he was losing “long, unbroken hours” gambling online – splashing money he had saved for a house deposit, including £11,000 in a single day.

Several times, he tried to quit. In 2011, he agreed to hand control of his money to his mother. But when he got his bank accounts back his gambling resumed, ramping up with Sky Bet in August 2012. He hid it from his wife, logging on while she slept, and begged from friends and family. He also used daily spending caps, tried to shut his account, and self-excluded from two other gambling platforms, temporarily preventing him from using them.

It didn’t work: by early 2017, he was regularly using 40 platforms. “It was a crazy time. I couldn’t concentrate. It was a haze. All I wanted to do was gamble,” he said. In 2018, he again placed a spending limit on his Sky Bet account – the platform he liked most. But he felt powerless to properly benefit from the controls, raising the limit from £100 per day to £250 and eventually £1,000. By the end of that year, he felt he was facing “financial armageddon”, averaging monthly losses of £1,793, and found himself contemplating suicide.