The Competition and Markets Authority (CMA) announced on 23rd June 2017 that they will be taking action against a number of online gambling companies for alleged anti-competitive behaviour.
Online gambling companies are often relying on ‘free bet’ promotions a lot these days. The volume of advertising for ‘free bets’ on TV, Radio and the Web speaks for itself.
It’s obvious that people are being enticed to join up, and the CMA is concerned that companies aren’t explaining what can often be stringent terms and conditions gamblers are then tied to when they sign-up to their services…
The CMA’s three main concerns are:
- Gambling companies don’t provide enough information, or provide confusing information, at the sign-up point – leaving gamblers confused, overwhelmed or inadequately informed of the risks they may be putting themselves in
- Certain restrictions have been put in place to prevent gamblers from withdrawing money they win using a deposit. As deposits are put in early, this may prevent gamblers from leaving sooner rather than later
- Potentially unfair rules that make it difficult for gamblers to win and/or withdraw the money when they do win. Gamblers may be restricted from using certain strategies during gameplay which hinders their ability to make and withdraw money
The CMA has been working closely with the Gambling Commission to make sure these online gambling companies are not breaching any rules. The authority is encouraging gamblers to come forward to share their experiences to see what tactics firms are employing.
Things they’re looking at include the following:
| Gamblers not being allowed to withdraw any money they have put in unless they have already bet the same amount once or more. |
| Requiring players to do certain activities before they can withdraw their money, like take a photo with a “winner’s cheque” for the company’s website. |
| Not allowing gamblers from withdrawing less than a certain amount of money. Sometimes these online gambling companies may set the minimum amount unreasonably high so gamblers have to win a lot (perhaps by betting more) before they can withdraw their winnings. |
| Conversely, setting an unreasonably low withdrawal maximum so winners of large amounts can’t withdraw everything at once – perhaps only 10% of their winnings once a week. |
| Setting unreasonable deadlines for gamblers to verify their identities or credit card information before they can withdraw their winnings. |
| ‘Dormancy penalties’ imposed when a gambler’s account is inactive for a period of time. Gamblers who haven’t made a bet or withdrawn their money for a while might find their winnings or deposits forfeited in part or in full as a penalty. |
All of these actions restrict may a gambler’s enjoyment and ability to gamble and withdraw winnings fairly. Gamblers therefore may find it much harder to leave and use other firms which can restrict competition as the consumer may not be free to make an informed decision on the goods and services a firm has to offer, and is restricted from moving if they want to.
The Senior Director of Consumer Enforcement at the CMA, Nisha Arora, had this to say:
“People should always get the deal they’re expecting if they sign up to a promotion, and be able to talk away with their money when they want to… New customers are being enticed by tempting promotions online to find the dice are loaded against them.”
The Gambling Commission is taking the investigation very seriously and warns “the gambling industry should be under no illusion that if they don’t comply with consumer law, we will see this as a breach of their operating licence, and take decisive action.”
Currently worth £4.5 billion, the gambling industry must stop exploiting their customers for financial gain if this is going on.
The CMA and the Gambling Commission is yet to reach a final decision.