BUSINESS

UK online gambling operators face strict new bonus offer rules

TAGs: competition and markets authority, UK Gambling Commission

uk-gambling-sites-bonus-offer-restrictionsTwo different arms of the UK government have fired warning shots across the bow of the online gambling industry regarding its compliance record, while suggesting strict new bonus offer rules are in the works.

On Tuesday, the UK Gambling Commission (UKGC) hosted its annual Raising Standards conference in Birmingham, to which UKGC chairman Bill Moyes welcomed online gambling operators by warning them that “public support for gambling is beginning to decline.”

Describing his words as a “call to action,” Moyes said the online gambling industry was “approaching a tipping point” where it will have to choose whether it’s viewed as “a responsible part of the entertainment industry” or as “beyond redemption and requiring tough action to tackle its worst excesses.”

Boyes noted that the UKGC had dished out over £10m in penalties on major online gambling operators in recent months, and while these companies’ senior management may have been “horrified” by their responsible gambling shortcomings, their “well-crafted annual assurance statements are worthless” unless backed up by concrete practices.

UKGC CEO Sarah Harrison’s keynote address put online gambling operators on similar notice that they hadn’t done enough to make their product fairer and safer for consumers.

Harrison noted that, at last year’s gathering, she’d “urged you as an industry not to wait for a crisis to happen that shakes the very foundation of customer trust.” Harrison said that an ‘honest’ look at the industry revealed that “the bald facts are that you haven’t done enough to demonstrate to us that you’re there yet.”

Harrison noted that the UKGC was “prepared to intervene on a precautionary basis” if it determines that operators are falling down on their obligations to consumers. The UKGC’s work shows that “your due diligence and consumer protections are not up to scratch. We will intervene and you should consider yourselves warned.”

CMA TAKES HARD LINE ON BONUS OFFERS
Also speaking at the event was George Lusty (pictured), project director at the UK Competition and Markets Authority (CMA), which announced a year ago that it was launching a probe of online gambling operator’s terms & conditions to see if operators were guilty of misleading consumers.

Lusty’s address (read it here) noted that the CMA’s probe had encountered “a very large number of concerns” with operators’ promotional offers. For one thing, despite “a very detailed study” of these offers T&C’s, “the reality of gameplay was frequently quite different from what we expected.”

Lusty added that important issues contained in these promos “remained unclear to us even after operators had provided such demonstration,” and Lusty argued that if the CMA can’t figure out these distinctions, “they would likely not be clear to consumers at large.”

Lusty said the CMA’s probe had led it to open a new line of investigation regarding the hurdles consumers face when withdrawing from their online accounts. Lusty took issue with “the application of so-called ‘dormancy’ terms, the use of minimum withdrawal limits and other terms that appear inappropriately to make it harder for consumers to access money which is legally theirs.”

Along this line, the CMA believes that “making the withdrawal of deposit winnings conditional on meeting wagering requirements is a significant restriction on the consumer’s right to withdraw.” The CMA believes this “represents a significant shift in the legal position from the consumer’s perspective, with no equivalent restriction imposed on the operator.”

Furthermore, the CMA finds that forcing punters to “commit to an extended period of gambling before winnings can be withdrawn” prevents gamblers “from stopping gambling whenever they choose (and thus presenting a particular risk to consumers vulnerable to problem gambling).”

The CMA doesn’t believe that its concerns on this front can be “adequately addressed through improved transparency.” As such, the CMA recommends that operators stop offering promos that include restrictions on the withdrawal of deposit winnings, while also ensuring that consumers can “clearly distinguish between play with funds that are subject to restrictions and play with unrestricted funds.”

Most of the UK gambling industry has been focused on the government’s still-undefined plans to impose new restrictions on the use of fixed-odds betting terminals (FOBT) in high-street betting shops. But as certain parties have been warning for some time now, if anti-gambling campaigners managed to claim their pseudo-slots scalp, online slots wouldn’t be far behind, along with many other aspects of online gambling activity.

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