A new trend in online casinos?

A new trend in online casinos?

This is a guest contribution by Pavlos Sideris, Founder of NoWagering. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.

The online casino industry has been in somewhat of a frenzy in recent months following a number of severe warnings issued by the UK’s Competition and Markets Authority. The warnings came after the CMA launched an investigation into “whether online gambling firms are treating their customers fairly.”

A new trend in online casinos?The probe followed concerns raised by the Gambling Commission about “misleading promotions and unfair terms being used by firms to block players’ payouts.” License conditions require “all licensed gambling operators to include in their advertisements any significant limitations relating to promotions to avoid misleading consumers.” However, the exact opposite was found to be the case, and as Sarah Harrison Gambling Commission Chief Executive noted: “I continue to have concerns that many of these [terms and conditions] appear to bamboozle rather than help the customer.”

Excessive Wagering Requirements

The unfair terms largely relate to excessive wagering requirements applied to bonuses and free spins offered by casinos to acquire new players. The requirements state that players must wager their bonus as much as 40 times over before they can request a withdrawal of any winnings resulting from it. This makes it practically impossible for a player to actually win anything, or at least withdraw anything they might win. Wagering conditions associated with free spins are crueler still, which usually stipulate that any winnings derived from the free spins must be wagered 40 times over before they can be withdrawn i.e. a player would have to wager a further £4,000 before being able to withdraw £100 in winnings.

A 40X wagering requirement is the industry average, but it is not uncommon to see some bonuses carrying a 50X or even 60X wagering requirement. Furthermore, the conditions spark concerns that players are being forced to spend more time gambling in order to fulfil wagering requirements, rather than stop gambling and cash-out at a time which would be reasonable and responsible.

Regulatory Pressure

The CMA’s warnings were shortly followed by a number of severe penalties issued by the Gambling Commission. Bgo Entertainment was fined £300,000 for misleading advertisements; 888 Holdings was fined £7.8m for failures in its handling of vulnerable customers; and only this week, Gala Interactive was fined £2.3m for breaching regulations which protect consumers.

The industry reacted by ensuring that significant terms were clearly and boldly communicated alongside their promotions. However, as their obligations extend to all advertisements, including those published by their affiliates, operators had the task of ensuring their partners were also compliant. The burden transpired to be too much for Sky Bet’s affiliate programme, which promptly closed in September, terminating contracts with its affiliates as well as their commissions.

Bgo took an alternative approach to becoming compliant. They scrapped their wagering requirements entirely, meaning that players could withdraw their winnings resulting from free spins and bonuses immediately, without any fuss, and without any complicated terms to contend with.

Wager-Free Casinos

Whilst Bgo is the first mainstream brand to switch to an entirely wager-free model, it isn’t the first to employ simplicity, and importantly, fairness with regards to promotions. Several new brands launched in recent years have also adopted a wager-free approach. PlayOJO proudly has “no wagering, on anything, ever”; mFortune promises that “all wins will be placed into cashable credit and can be withdrawn at any time”; Kaboo offers “wager-free winnings on bonus spins”; and Lucky Niki offers “no wagering free spins.” Even William Hill recently introduced wager-free spins as part of its welcome offer.

Whether this is in fact a trend or merely a temporary niche remains to be seen, but with the pressure clearly mounting on operators as well as their affiliates it wouldn’t be unreasonable to expect more to follow suit, at least by rethinking their acquisition offers. As Bgo’s CFO Hannah Westley noted, she remembers “when a 100% match bonus with a 20x turn requirement was the standard casino sign-up offer” and now “we are seeing, 200%’s, 400%’s, no deposit bonuses, free spins, higher turn requirements, max bets and less/non contributing games.”

The rise in player complaints in recent years also can’t be ignored, which often relate to wagering requirements and restrictions. Players are losing confidence in casino bonuses and promotions, and so it also isn’t unreasonable to expect them to eventually seek out trustworthy casinos with fair and transparent terms.

About the author:

Pavlos Sideris is Founder of NoWagering, the only dedicated resource of no wagering casinos, and bonuses with low wagering requirements.