Arising from today’s announcement by the CMA, amounting to an order to all online gambling operators to stop unfair promotions, the Gambling Commission has published a letter (that can be downloaded below) making it clear that immediate steps must be taken by such operators to comply with consumer protection law or face enforcement action.
The letter sets out the Commission’s expectation that all operators will comply with that requirement within the same timescales that are set out in the undertakings given to the CMA by each of William Hill, Ladbrokes and PT Entertainment, as follows:
- 28 February 2018 for paragraphs 1, 2, 4-14 (which is likely to prove too tight for many operators who have been awaiting greater certainty on the CMA’s precise requirements before implementing changes) and
- 31 July 2018 for paragraph 3 (i.e. for the implementation of prompts for consumers when they are playing with restricted funds).
Using the below list of undertakings given by Ladbrokes (also downloadable below) as an example, it will be clear what needs to be done:
1. Ensure all Significant Conditions are provided
a) to consumers in a clear, timely, intelligible, unambiguous, transparent, nonmisleading and prominent manner;
b) within the advert and with the headline offer on all relevant landing webpages and sign-up webpages (or Equivalent) for that Promotion, and
c) within the advert and with the headline offer on any other advertising on any medium for that Promotion, except where it is not possible to do so due to significant limitations on time and/or space in the relevant advertising medium, in which case as much information about the Significant Conditions as possible should be provided within the advert, and with the headline offer, together with a link to a webpage (or Equivalent) containing all the Significant Conditions and other terms relating to the Promotion in full.
2. Ensure that all terms and conditions relating to a Promotion, including terms which apply to all Bonuses, are accessible:
a) before the consumer signs up, (i) on all relevant landing pages and sign-up pages for that Promotion (or Equivalents) and (ii) within a single click (or Equivalent) from any other advertising on any medium for that Promotion, to the extent that it is not possible to include such terms and conditions on such advertising; and
b) once play commences, within a single click from the bonus tab on the consumer’s account/home page (or each relevant Equivalent).
3. Ensure that at all times the consumer is informed:
a) when they are playing with Restricted Funds, and,
b) if they are playing with Restricted funds, about the nature of, and consequences of non-compliance with, the Promotional Play Restrictions or Wagering Requirements.
Restrictions on withdrawing deposits and deposit winnings
4. Allow consumers to withdraw their Deposit Balance at any time (including when a Bonus is pending or active on the account) and without restriction, except as necessary to comply with any General Regulatory Obligations or as provided further below, and:
a) amend its general terms and conditions to clearly reflect this right of withdrawal and ensure this is similarly the case for the terms and conditions applying to all future Promotions; and
b) clearly and prominently state this right of withdrawal to consumers (i) during the sign-up process for a Promotion and (ii) on the consumer’s account page (or Equivalent).
This paragraph does not prevent Ladbrokes from deducting a fee charged to consumers for processing that withdrawal or, where a consumer seeks to withdraw less than their full Deposit Balance, reasonably to limit the size or number of separate withdrawals that a consumer may make, provided that this is done pursuant to a fair and transparent term in the contract that the consumer has agreed to. In particular, any fee should not exceed a reasonable estimate of the costs incurred directly by Ladbrokes in relation to the processing of that withdrawal.
5. Ensure that the Deposit Balance and (if applicable) the Bonus Balance are always displayed separately to the consumer in a clear and prominent manner.
6. Ensure 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.
Promotional Play Restrictions
7. Ensure that terms and conditions setting out any Promotional Play Restrictions clearly specify all prohibited types or patterns of play, and do not reserve sole discretion on Ladbrokes to (a) determine when play falls within these specified categories, or (b) determine other forms of play to be in breach of the terms and conditions.
8. Structure its terms and conditions to ensure that terms setting out prohibitions and sanctions on account 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, are contained in separate terms to those relating to any Promotional Play Restrictions.
9. Ensure that where the decision has been taken that a consumer is to lose their winnings or is to be refused a requested withdrawal from their account on the grounds of a breach of Promotional Play Restrictions, that the consumer is provided with a full explanation of the breach of the relevant Promotional Play Restriction, including the specific terms breached. For the avoidance of doubt, this does not require the disclosure of information to the consumer to the extent this would cause an operator to breach any General Regulatory Obligation.
Free Bets and Account Restrictions (in relation to sports betting)
10. Not to enforce or seek to enforce any Account Restriction against a consumer who has, prior to such Account Restriction being notified to them, made one or more qualifying bets in respect of a Free Bet Promotion, where enforcing such an Account Restriction would
a) affect the consumer’s ability:
i. to receive any of the free bets, or the full expected value of any of the free bets, from that Free Bet Promotion, having placed all the necessary qualifying bets;
ii. to receive any of the free bets, or the full value of any of the free bets, to which they would be entitled upon placing the remaining qualifying bets required by that Free Bet Promotion; or iii. to complete any Wagering Requirements associated with that Free Bet Promotion; or
b) materially affect the consumer’s ability to complete the qualifying bets required by that Free Bet Promotion.
11. Ensure that any notification to a consumer that an Account Restriction has been applied to them informs the consumer (i) that the Account Restriction is without prejudice to their participation in full in any Free Bet Promotion for which they have already placed any qualifying bets; and (ii) of the steps they should take to receive the full benefit of any free bets otherwise altered or removed by the application of any Account Restrictions in contravention of paragraph 10 above.
12.Amend its general terms and conditions so that they provide for the consumer to obtain the full number and value of any free bets in the circumstances set out in paragraph 10 above, and ensure that the terms relating to future Free Bet Promotions make similar provision.
Compulsory Publicity (whether in relation to Online Gaming or otherwise)
13. Not to use, enforce or seek to rely on any term in a consumer contract or notice which has the object or effect of:
a) obliging consumers to participate in publicity promoting Ladbrokes or an associated business if required to do so, and/or
b) deeming the consumer, by accepting and agreeing to the terms of such a contract or consumer notice, to have consented to the use of any personal information (including name) for promotional purposes for the benefit of Ladbrokes.
14. Produce a report to the CMA by 31 July 2018 on the implementation of the above undertakings to include:
a) An explanation of the changes made to general and bonus terms and conditions, internal policies, marketing and technical practices to implement the undertakings (including changes made prior to giving these undertakings but which address the issues covered by them); and
b) An explanation of how the undertakings and changes have been embedded in internal policies, guidance and training materials for employees, providing copies of such documents
The letter containing the above undertakings given by Ladbrokes provides definitions of the following words and phrases contained within the undertakings: “account restriction”, “bonus”, bonus balance”, deposit balance”, effective date”, “equivalent”, “free bet promotion”, “general regulatory obligations”, “mixed wager”, “online gaming”, “promotion”, “promotional play restrictions”, “restricted funds”, “significant conditions”, “unrestricted funds” and “wagering requirements”.
Sarah Gardner, Gambling Commission Executive Director is quoted in a press release as saying:
- “As the gambling regulator, we will not hesitate to take action against those that do not treat their customers fairly.
- The principles set out by the CMA today make real progress in making gambling fairer and safer for customers. Gambling firms must now ensure that the terms applied to their promotions are clear, so that customers can understand the deals they are signing up to and what they need to do to fully benefit from promotions.
- We support the CMA’s findings and expect all online gambling businesses to take immediate action to review their practices in line with these findings, in the same deadlines outlined. If firms cannot comply, they must remove any promotions until they can.”
The Gambling Commission says that it will continue to work with the CMA to tackle other shared concerns about unfair terms and practices within the gambling sector and will publish advice once any further investigation and enforcement action by the CMA is completed.
As we have previously reported, the Gambling Commission is also calling for views by 22 April 2018 from consumers, gambling businesses, stakeholders and members of the public on proposed changes to its LCCP, relating to marketing and advertising, unfair terms, and complaints and disputes.