US regulators should check out the UK CMA position on bonus conditions

UK Online Gamblers Can Now Withdraw Their Money More Easily After Investigation

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The UK’s Competition and Markets Authority (CMA) launched an investigation into unfair practices in the online gambling industry in October 2016.

The investigation has already resulted in a guidance note to online gambling companies that was updated on Aug. 29.

Two more companies have now removed obstacles to players withdrawing their money after CMA pressure.

Jumpman Gaming and Progress Play used to have terms and conditions that prevented players from withdrawing their account balances if they hadn’t logged in to their accounts or if they didn’t meet deadlines for proving their identity.

The CMA decided that any terms such as these were “unfair” under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and Part 2 of the Consumer Rights Act 2015 (CRA).

Jumpman and Progress Play join William Hill, Ladbrokes and PT Entertainment Services — which operates TitanBet and—in changing their practices following CMA direction.

Restricted Bonus Conditions can’t prevent customers cashing out

At issue for Will Hill, Ladbrokes and Titanbet were restrictions on cashing out while a bonus was pending. Customers were prevented from cashing out while they were earning their bonus, or if they did, then they lost any proportion of the bonus earned.

The CMA deemed that this was “unfair.”

All of the sites mentioned have now adopted one or other form of the condition that:

“Promotional Play Restrictions and Wagering Requirements (if applicable) do not apply to any play by a consumer with their Deposit Balance except where ingame mechanisms automatically prevent a consumer from placing a wager that contravenes the Promotional Play Restrictions.”

In other words, players no longer have to clear a bonus before cashing out. The act of withdrawing funds from their deposit balance won’t mean they lose their bonus, and online operators will no longer be able to offer bonuses with such restrictions.

One of the CMA’s key objections is that penalizing players who withdraw their funds is an unacceptable pressure that forces players to gamble when they don’t really want to.

Changing their ways

The practice has become widespread among online gambling, whether poker, casino or sports betting, but companies must now eradicate such terms and conditions or face disciplinary action by the UK Gambling Commission (UKGC).

CMA Project Director George Lusty said:

“Gambling always carries a risk, but players should never face unfair restrictions that prevent them from getting at their money. Firms mustn’t stack the odds against players, by putting unfair obstacles in their way, or making it difficult for them to stop gambling when they want to.”

The UKGC Executive Director Sarah Gardner commented:

“We back the action taken by the CMA today. Gambling firms must treat their customers fairly and not attach unreasonable terms and conditions to their promotions and offers.

We expect all Gambling Commission licensed businesses to immediately review the promotions and sign up deals they offer customers and take whatever steps they need to take, to the same timescales agreed by the three operators, to ensure they comply.”

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US regulation follows a different philosophy

The US and UK may share a common language, but there is a critical difference between the underlying philosophies of US and UK gambling regulation.

In general terms, the US approach to regulation is to specify everything in what is known as a “tick list” approach. If operators comply with everything specified, then they are legally compliant, and safe from tort litigation.

The UKGC approach is to set general standards and offer non-mandatory guidance. The UKGC doesn’t guarantee that following its advice means that an online gambling company is compliant — that issue is left up in the air.

If a complaint is made, then the company involved must prove to either the UKGC or the courts that its compliance procedures meet the standard.

UK law, particularly the Consumer Rights Act, includes the thoroughly nebulous concept of “fairness.”

All businesses are required to treat customers fairly — something that isn’t defined. Where there is doubt, operators can either accept the discipline and if necessary, sanctions of the regulator, or take the expensive route of contesting the decision in court.

It is arguable whether the UK or US system is better. They each meet the needs of cultures which have fundamental differences regardless of their similarities.

The concept of a contract is treated differently in each legal system. In the US what is written in the contract document is broadly authoritative.

In the UK it is secondary to what each party understood when they made the agreement. Any document is only evidence of a contract, it is not the contract itself.

The UK experience is still useful to US regulators. Those which take note of the CMA investigation may want to take a closer look at the restrictions they themselves impose on gambling promotions and bonus conditions.

- A former founder of Poker Industry Pro and Head of Content at PokerNews publisher iBus Media, Joss Wood is a graduate in English from the University of Birmingham. Joss also holds a master’s degree in Organisational Development from the University of Manchester. His career path has taken him from the British Army, through business and finance to seven years as a successful professional poker player.
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