Online Gambling Operators Criticized by UK Watchdog

Online gambling operators have been criticised for unfair terms attached to bonuses and promotions by the UK´s Competition and Marketing Authority.

Yesterday, the UK´s Gambling Commission hosted its second “Raising Standards” conference – an event in which keynote speakers present details about the efforts being made to make gambling fairer and safer for consumers. The event was attended by representatives from the gambling industry, the UK government, regulators, consumer groups and support groups.

Among the keynote speakers was George Lusty – a Project Director at the UK´s Competition and Markets Authority, who leads the team investigating complaints about unfair and misleading terms attached to bonuses and promotions by online gambling operators. Lusty´s team has the power to intervene when complaints are upheld and enforce the UK´s consumer protection laws.

How Can Online Gamblers be Expected to Understand the Terms if We Can´t

Lusty opened his speech by explaining how his team within the Competition and Markets Authority works closely with the UK Gambling Commission to enforce consumer protection laws and create a fairer and safer environment for online gamblers. He added his team had received an increasing volume of complaints from consumers about online operators´ bonus terms and an investigation was launched.

The investigation found many online operators´ terms were not as “fair and open” as they are supposed to be in order to comply with their operating licenses. Lusty´s team approached several of the operators and asked them to demonstrate how specific terms related to the reality of gameplay and what they meant in real terms to online gamblers. The outcome was a source of concern for Lusty and his team.

Investigators found the reality of gameplay was often quite different from what they expected, and concluded operators were failing to properly inform online gamblers. Lusty commented in his speech that important issues remained unclear to his investigators even after the operators had provided a real-time demonstration; and, if these issues were unclear to experienced investigators of consumer law, what chance did the man in the street have of understanding them.

Lusty Lists His Six Primary Concerns

Although speaking about consumer protection in the online gambling industry in general, a number of Lusty´s primary concerns will be particularly familiar to online poker players. His six primary concerns were:

A Lack of Transparency

As the investigation revealed, online operators are failing to provide online gamblers with details of restrictions and what these restrictions may mean to their online gambling experience. The terms as presented, Lusty said, did not equip online gamblers with the information they need to make an informed evaluation of the nature and value of the promotion.

He particularly highlighted “sticky” bonuses – that cannot be withdrawn and can only be used for placing bets – and the interaction between promotions when more than one is being offered. Lusty said the lack of transparency could result in players failing to understand what they are agreeing to and that operators need to address these issues by making the consequences of opting into a promotion clearer.

Restrictions on Withdrawals

Most online poker players will be familiar with the fact that, if you request a cashout while clearing a bonus, the remainder of the bonus is forfeited. Lusty said not only is this practice unfair, it is against consumer protection regulations. Furthermore, by forcing players to commit to an extended period of gambling, online operators may be encouraging problem gambling among vulnerable consumers.

Rather than being more transparent about restrictions on withdrawals, Lusty said these restrictions should be scrapped altogether. He recommended online operators should stop offering bonuses and promotions with restrictions on withdrawals or create a solution in which players have restricted and unrestricted funds that they can choose how to use.

Restrictions on Withdrawing Unwagered Funds

This is another scenario that will likely be familiar to online poker players – the inability to make a deposit, play a while, and then request a cashout of the funds you have not used. These restrictions fail to respect players´ rights to stop playing at the time of their choice and withdraw the balance of their bankrolls. According to Lusty, the restrictions do not have a legitimate justification and are contrary to the Gambling Commission´s licensing regime.

In addition to the restrictions on cashing out until a minimum number of bets has been made or a wagering requirement has been met, Lusty also had a go at online operators who charge fees when accounts remain dormant for long periods of time. By coincidence, Party Poker last week announced it was going to stop charging inactivity fees after “listening carefully to player feedback and responding positively to suggestions for improvements.” Undoubtedly the CMA´s suggestions for improvements.

Unfair Betting Restrictions

The Competition and Markets Authority considers several types of betting restrictions it found to be unfair. These include the maximum a gambler is allowed to stake on an outcome (this often affects sports bettors and casino gamblers clearing a bonus) and low risk betting strategies that some sites consider the abuse of a bonus and that could result in the forfeiture of a player´s bankroll.

Acknowledging that gamblers did not have a “right to bet”, Lusty said once an operator accepts a bet, a binding contract is in place and – should the bet win – the player has an enforceable debt. If online operators want to avoid their legal responsibilities by implementing unfair betting restrictions, Lusty said they should clearly state what the restrictions are and what constitutes a low risk betting strategy.

Withdrawing Winnings from Free Bets

Although this concern was directly targeted at sports betting operators who offer free bets and then make gamblers reinvest their winnings several times over before they can withdraw what´s left, there are several major poker sites that have similar restrictions on the free sports bets and casino freeplays they offers as prizes in their promotions.

Lusty noted that operators are not required to pay out free bets in cases where fraud, cheating or other clearly inappropriate conduct is suspected, but should ensure they are not seeking to enforce account restrictions – particularly when the consumers have been targeted by “personalized promotions” based upon their previous betting action – and also that they meet expectations and treat consumers fairly.

Unauthorised Publicity

This probably won´t be an issue once the EU´s General Data Protection Regulation is introduced next May, but the final concern related to online operators using players´ personal information for marketing purposes without their consent. This doesn´t happen very often in online poker, but some online casinos make it a condition of playing at their sites that big winners forgo their right to privacy.

Lusty stated this practise has to stop and the unfair condition should be removed as, even before the implementation of the General Data Protection Regulation, the UK´s existing Data Protection Act requires personal data to be processed fairly and lawfully. Lusty concluded his speech by telling delegates this was an opportunity for operators to review the terms of their bonuses and promotions and revise them where necessary before enforcement action becomes necessary.

The Implications of Lusty´s Speech for Online Poker Players

Online poker operators have the choice of implementing the Competition and Markets Authority´s suggestions and recommendations voluntarily, or have them imposed upon them. Those that fail to comply with consumer protection measures will be reported to the Gambling Commission, who will take an unfavourable view of the lack of compliance when the operator´s license is up for review.

It was announced during the conference the Competition and Markets Authority has already opened enforcement cases against the online operators found in breach of consumer protection laws during its investigation in the summer. These will likely result in fines in addition to the £10+ million already issued this year and corrective action. Alternatively, the Competition and Marketing Authority has the power to pursue court action and force the removal of unfair terms attached to bonuses and promotions.

Here at PokerNewsReport.com, we believe Lusty´s speech at the Raising Standards conference is good news for all online poker players – not just those based in the UK. We have refrained from providing examples of where online poker sites attach unfair terms to their bonuses and promotions as few are innocent and to name one or two would create an imbalance. However, as ever, we recommend players read and understand the terms and conditions of any promotion before participating in it.