Are online gambling companies playing a sleight-of-hand?
First published by Admin on March 06, 2017 in the following categories: Investigations and tagged with cma
An inquiry into the gambling industry has been launched by the Competition and Markets Authority (CMA). The competition watchdogs are concerned whether the gambling companies are treating their customers fairly.
In an industry as valuable as this, it’s important the CMA investigate any potential infringements that could affect consumers.
Importance of fairness
Nisha Arora, CMA Senior Director for Consumer Enforcement, understands the risks flowing from gambling. However, she highlights the procedures of play should be as fair as possible, saying:
“…gambling inevitably involves taking a risk, but it shouldn’t be a con. We’re worried players are losing out because gambling sites are making it too difficult for them to understand the terms on which they’re playing, and may not be giving them a fair deal. We are now investigating to see whether firms are breaking the law.”
Investigation launched in October 2016
The CMA’s investigation is to ascertain and decide whether consumer protection powers should be exercised to tackle allegedly unfair or misleading behaviour in the industry.
The investigation was launched in October 2016 where the CMA issued Information Notices asking consumers to provide further information and evidence to address their concerns. Following on from the information that was received from consumers, the CMA wrote to additional operators to shed some more light. They also requested information on certain issues in relation to free bet promotions too. This has been a reoccurring issue for consumers who have played sports bet – which allows them a free bet according to the terms of the promotion – but then have been turned away for not being eligible for the promotion.
Breach of laws and regulations?
The competition watchdog is most concerned with potential breaches of consumer law; especially in the online gambling industry. This concern was brought to the attention of the CMA by the Gambling Commission, and now both bodies are investigating as part of a joint programme to tackle the issues around fairness and transparency.
The Gambling Commission was set up under the Gambling Act 2005 to regulate commercial gambling. The Commission regulates gambling companies to ensure they are transparent and accountable. A key part of their work is to ensure that gambling companies are compliant with the law and codes of practice such as:
- Gambling Act 2005 and any regulations flowing from the Act;
- Licence conditions and codes of practice;
- National Lottery etc. Act 1993.
To ensure compliance…
To ensure gambling companies adhere to the regulations, the Commission undertakes compliance activity, which includes:
- Carrying out reviews and visits;
- Giving specific advice or guidance ;
- Taking remedial or preventive action;
- Varying or imposing additional licence conditions;
- Reviewing financial information .
How consumers are potentially losing out
The huge concern is that consumers are losing out in a ‘big business, small consumer’ scenario. This claim is reportedly substantiated by the fact that:
- Users are reportedly being locked into complex and strict requirements linked to gaming promotions that are difficult to understand and may be un-achievable. This can include making the user play for longer before they can cash out. There is also a concern that users aren’t allowed to cash out their remaining winnings if they choose to stop playing;
- Gambling companies have wide discretion to cancel bets or alter odds after bets have been taken, perhaps because they had made a mistake when the odds were first set. The CMA are in the process of investigating whether these terms are inherently fair;
- Users are restricted from challenging a company’s decision as per their allegedly ‘unfair’ terms. This may include putting a short time limit on making a complaint as well as suggesting that there aren’t any other means of redress available.
These are suspected tactics deployed by gambling companies to block users’ pay-outs. The investigations will no doubt uncover whether there is any truth in the potential problems identified.
Update
An update is due in April. The CMA and Gambling Commission will decide whether further action is required and, if not, guidance will be published by the regulatory bodies.