Digital PokerI like a flutter; and it seems others do too. Online gambling is an industry worth over £4 billion per year in the UK, with approximately 5.5 million Brits regularly using online gambling websites.  This figure has apparently grown by 146% since 2009; it’s big business.  And it’s only likely to get bigger, particularly in light of people’s ever-increasing reliance on, and attachment to, mobile devices.

Imagine being lured onto a particular website by an irresistible sign-up bonus (a no-lose guarantee, free bets, or enhanced longer odds) and, having won your bet, realising that, in signing up, there were a number of terms and conditions attached to that bonus of which you weren’t aware.  Free bets as opposed to cash payouts, or the requirement of having to place a mandatory minimum number of further bets in order to be able to make use of the sign-up promotion are just two ways in which online gambling operators attract new customers with special deals and promotions.  And it seems that a lot of these customers are not happy, leading to a large number of complaints to the Gambling Commission.

The Gambling Commission, in turn, raised their concerns with the Competition and Markets Authority (CMA) about online gambling operators potentially using “unfair terms” and “misleading practices” to deceive customers and block payouts.  As a result of these concerns, the CMA announced on 21 October 2016 that it had launched an investigation into online gambling and, more specifically, into suspected breaches of consumer law by online gambling operators in the UK.  The aim of the joint investigation – the Gambling Commission has the power to revoke the licences of infringing operators – is to tackle issues around fairness and transparency in the gambling industry.

The CMA’s press release confirms that its concerns relate to whether or not players are losing out because of the operators’ behaviour, in particular:

  • Players may be locked into complex and strict requirements linked to gaming promotions that are difficult to understand and may be unachievable. These can include terms that require people to play for longer than they had bargained for before they can withdraw money. The CMA is also concerned that players may not be able to withdraw what remains of their deposit, and any winnings, when they want to stop playing;
  • Companies having a wide discretion to cancel bets or alter odds after bets have been accepted, because they made a mistake when the odds were first set. The CMA is investigating whether the terms operators rely on in cases such as this are fair; and
  • Terms restricting players’ ability to challenge a firm’s decision, for example by placing very short time limits on making a complaint or inaccurately suggesting that other means of redress are not available.

After launching the investigation, Nisha Arora, CMA Senior Director for Consumer Enforcement, said:

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’re now working closely with the Gambling Commission to examine this more closely.

In turn, Sarah Harrison, the Chief Executive of the Gambling Commission, stated:

We expect the gambling industry to ensure terms and conditions are not unfair. However, operators are still not doing enough. I continue to have concerns that many of these appear to bamboozle rather than help the customer make informed choices.  Gambling, by its very nature, is always going to involve risk but customers must have faith that if they win, they will not end up feeling that the deck is stacked against them because of an obscure condition that they did not properly understand.

Indeed, the launch of the CMA’s investigation should not have come out of the blue for online gambling operators.  In February 2016, Sarah Harrison, then new to her role at the Gambling Commission, addressed those at the 2016 ICE Totally Gaming conference in London and outlined emerging issues and key areas of future focus for the Gambling Commission, with a particular focus on (i) challenges to marketing and advertising of gambling products; and (ii) the terms and conditions imposed by operators.

It appears that at least some operators did not take sufficient note of her words, although the Remote Gambling Commission, which represents online gambling operators, was quick to downplay the scale of the problem, pledging full cooperation with the CMA’s investigation, but suggesting that there was “no reason to believe that there are widespread failings” in the industry.

The first step in the CMA investigation is the issuing of Information Notices to online gambling operators requiring evidence from them that they are complying with consumer law.  The CMA is also asking consumers that have experienced such issues (and that have made complaints to the Gambling Commission) to provide it with further material.  Depending on the evidence gathered by the CMA in this first stage, it will hope to be in a position to determine whether enforcement action is (or may be) required.

The CMA has indicated that it hopes to be in a position to provide an update into the initial findings of the probe in early 2017.  It will become clearer then how widespread any failings are in the online gambling industry.