CMA Project Director, George Lusty, delivered a speech yesterday (at the Gambling Commission’s second annual Raising Standards conference in Birmingham) entitled “Online gambling: the investigation so far and next steps”, in which he provided a further update on the CMA’s investigation into potentially unfair and misleading terms and practices in the remote gambling sector.
His speech (that can be downloaded below and viewed on YouTube) set out:
- how the CMA has conducted the investigation to date,
- why it is taking enforcement action against certain gambling operators,
- further information on its legal concerns, in particular in relation to operators’ online gaming promotions and
- the changes that the CMA and the Gambling Commission are expecting all gambling operators to make in order to ensure they are complying with existing consumer protection law.
Insofar as enforcement cases are concerned, he said that the CMA began a process of consultation with the majority of operators in question during October, the process is ongoing, and the CMA expects to take a decision in December about whether it needs to proceed to court, or if it can secure acceptable undertakings to address its concerns.
In relation to the further line of investigation by the CMA into “a broader set of restrictions faced by consumers when trying to withdraw funds from online accounts, particularly connected 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”, he said that the CMA is still scoping that separate piece of work, and is contemplating a further round of enforcement activity next year alongside other options.
He said that, in terms of what gambling operators need to do now, the CMA’s position in relation to each of the following key consumer law concerns is as set out below (and summarised in the presentation slides that accompanied the speech, that can also be downloaded below):
(1) Lack of transparency of significant promotion restrictions
- Ensure all significant conditions are provided to consumers in a clear, timely, intelligible, unambiguous, transparent, non-misleading and prominent manner, including within the advert and with the headline offer on all relevant landing pages and sign-up pages for the promotion, and on any other advertising on any medium for the promotion.
- Ensure that all terms and conditions relating to a promotion, including terms which apply to all bonuses are accessible:
- before the consumer signs up, within a single click from (i) all relevant landing pages and sign-up pages for that promotion and (ii) any other advertising on any medium for that promotion; and
- once play commences, within a single click from the bonus tab on the consumer’s account page.
(2) Restriction on withdrawing deposit winnings
- Stop offering gaming promotions that include a restriction on the withdrawal of deposit winnings
- Ensure that terms clearly and prominently articulate the right to withdraw deposit winnings
- Ensure that consumers can clearly distinguish between play with funds that are subject to restrictions and play with unrestricted funds
(3) Restriction on withdrawing unspent deposit funds
- Stop imposing restrictions on withdrawing unspent deposit funds
- Ensure that terms clearly and prominently articulate the right to withdraw deposit funds
- Ensure that consumers can clearly distinguish between play with bonus funds that are subject to restrictions and play with their own money which is not.
(4) Fairness and transparency of play restrictions
- Ensure that promotional play restrictions do not apply to consumers’ deposits or the winnings therefrom, save where operators can ensure that invalid wagers cannot be placed
- Clearly outline all prohibited types or patterns of play, with no discretion reserved to the operator after the event
- Distinguish terms relating to gameplay restrictions from other terms which set out (valid) restrictions connected with allegations of fraud, collusion, use of multiple accounts, manipulation of software, exploitation of loopholes or other technical forms of abuse or other behaviour which amounts to deliberate cheating
- Provide full explanations to consumers where the application of gameplay restrictions results in the loss of (bonus) winnings
(5) Withdrawing free bets or reducing their value
- Ensure that they are not seeking to enforce account restrictions that would either remove a consumer’s entitlement to a bet, or reduce its value, where a customer has already placed all or some of the qualifying bets under the promotion
- Ensure they honour the deals that they make available to consumers (particularly where they have been directly targeted by marketing activity), ensuring that they meet expectations and treat their customers fairly. This is best and most clearly achieved by not seeking to enforce account restrictions that would either remove a consumer’s entitlement to a bet, or reduce its value, where a consumer has already placed all or some of the qualifying bets under the promotion.
(6) Compulsory publicity
- Do not use, enforce or seek to rely on such terms in their contracts.
Update: Following George Lusty’s speech, the Gambling Commission has now issued a warning to online gambling operators to review their terms and conditions before regulatory action is stepped up in the New Year to ensure that consumers are treated fairly.