UK online gambling licensees face “enforcement action” for violating consumer law


uk-competition-watchdog-online-gambling-enforcement-actionThe UK’s competition watchdog has launched enforcement action against a number of online gambling companies over misleading sign-up promotions.

Last October, the Competition and Markets Authority (CMA) announced it was investigating UK-licensed online operators for “potential breaches of consumer law, including misleading promotions and unfair terms, being used by firms to block players’ payouts.”

On Friday, the CMA announced that it was taking enforcement action after consultations with around 800 punters had identified “a number of operators engaging in practices likely to be breaking consumer law,” including excessive rollover requirements before winnings can be withdrawn. The CMA says it has “a range of powers at its disposal to bring any illegal activities to an end.”

The CMA didn’t identify the five targeted companies by name and clarified that it had “not reached a final view” on whether the operators had breached consumer law and would “listen to operators’ responses to its concerns.” The ultimate decision on whether the operators violated consumer law would have to be determined by a UK court. The CMA has promised an update on the file in December.

The CMA teamed with the UK Gambling Commission (UKGC) in its probe, and the UKGC issued its own statement on Friday saying the probe was meant to address “failings by operators around transparency and fairness of gaming sign-up promotions for new customers and practices around free bet offers.”

UKGC CEO Sarah Harrison said too many operators have been “relying on terms that are unclear with too many strings attached.” Harrison warned that licensees “should be under no illusion that if they don’t comply with consumer law, we will see this as a breach of their operating license, and take decisive action.”

The CMA has now opened a new line of investigation into online gambling operators restricting customers’ ability to withdraw funds from their accounts. Operators are required to check customer identification as part of their anti-money laundering (AML) requirements but some punters have complained that these requirements are being abused to restrict their ability to withdraw funds from their online accounts.

Earlier this week, the UKGC announced that online licensees risked violating their AML requirements if they only requested identity documents when customers requested withdrawals. The UKGC urged operators to assess AML risks “as the relationship progresses with the customer, not just at withdrawal stage.”

The UKGC also announced that online licensees have to provide their customers with access to three months’ worth of their gambling history to enable customers to determine how far up or down they are in their cumulative gambling activity. The UKGC had originally sought to require operators to provide a full year’s history but scaled this back following consultation with licensees.