UK CMA, Gambling Commission Launching Joint Internet Gambling Investigation
One of the primary reasons for online gambling regulation is to protect consumers from unscrupulous, or at least careless, operators. Over the years, we have seen some of the worst-case scenarios play out in the online poker world as principals at online poker rooms have outright cheated their players (ask my colleague Haley Hintze about UltimateBet some time, but bring a snack and use the restroom ahead of time, because it might take a while), while others have taken liberties with player deposits. There are many other instances, though, which are not as high-profile and not as noticeably malicious, in which sites try to confuse, disorient, and otherwise play funny with the rules in order to try to take advantage of unsavvy players. It is these cases that the UK’s Competition and Markets Authority (CMA) is concerned with as it announced last week that it is investigating whether online gambling companies are treating their customers in a fair manner.
In a press release, the CMA said:
This follows concerns raised by the Gambling Commission about potential breaches of consumer law, including misleading promotions and unfair terms, being used by firms to block players’ payouts.
The Competition and Markets Authority (CMA) is today issuing Information Notices under consumer protection legislation requiring evidence from companies as a first step to establishing whether enforcement action is required. It is also asking people who use gambling sites and have experienced such issues to provide us with further material.
CMA Senior Director for Consumer Enforcement Nisha Arora said, “Gambling inevitably involves taking a risk, but it shouldn’t be a con. We’re worried players are losing out because gambling sites are making it too difficult for them to understand the terms on which they’re playing, and may not be giving them a fair deal. We are now investigating to see whether firms are breaking the law.”
Sarah Harrison, the UK Gambling Commission’s Chief Executive, chimed in, saying, “We expect the gambling industry to ensure terms and conditions are not unfair. However, operators are still not doing enough. I continue to have concerns that many of these appear to bamboozle rather than help the customer make informed choices.”
“We approached the CMA to work with them to address issues in the gambling sector and we are delighted to have agreed a joint programme of work to ensure terms are fair and transparent,” she added.
One of the concerns the CMA has should be familiar to online poker players:
Being locked into complex and strict requirements linked to gaming promotions that are difficult to understand and may be unachievable. These can include terms that require people to play for longer than they had bargained for before they can withdraw money. The CMA is also concerned that players may not be able to withdraw what remains of their deposit, and any winnings, when they want to stop playing.
During the poker boom, online poker rooms and online casinos were engaged in an arms race to attract customers, with one of the weapons of choice being initial deposit bonuses. As most readers likely know, the poker rooms promised to give players additional money on top of their deposit, but to actually acquire that money, customers had to play a certain number of real money hands or generate a certain amount of rake. Back in the day, the terms were generally very favorable to the player and relatively easy to understand; the simpler it was to unlock the bonuses, the more a player would want to deposit.
The terms weren’t always simple, but as the years went on, the deals became less sweet, the “playthrough” requirements became more strict, and the fine print became tougher to decipher. Poker rooms began to differentiate between “dealt” rake and “contributed” rake, started using loyalty point calculations that varied based on stakes, game type, and the number of players at the table, and slowed down the speed at which bonuses were released. Bonuses often had to be unlocked within a fairly short time period, lest they be lost forever.
Casino bonuses – which I took advantage of like crazy for a while – became much less appealing as well. The amounts one had to wager went up and up (not that I necessarily have a problem with this – the casinos were giving it away for some time), but more importantly, many casinos began changing the bonuses from a normal bonus to a “sticky” bonus. That is, the bonus money could only be used to wager (it was typically given up-front in this case) and not be withdrawn.
The takeaway is this: online gambling promotions in many cases have become confusing. The sites often promise all sorts of bonus dollars which in reality are nowhere near possible to earn for the normal, casual player. The machinations behind how the promotions work and bonuses are unlocked can feel like advanced calculus. And when some bonuses can’t even be withdrawn, that can feel like an outright ripoff. Many of us who are online gambling veterans understand how all of this works, but novices don’t and can easily be wooed with unrealistic promises and promotions that are difficult to understand. The CMA wants to investigate to see if sites aren’t being totally straight with their customers.
Two other specific things the CMA intends to investigate are as follows:
• Companies having a wide discretion to cancel bets or alter odds after bets have been accepted, because they made a mistake when the odds were first set. The CMA is investigating whether the terms operators rely on in cases such as this are fair.
• Terms restricting players’ ability to challenge a firm’s decision, for example by placing very short time limits on making a complaint or inaccurately suggesting that other means of redress are not available.
The CMA says that the investigation “may lead to further action, such as enforcement action, or guidance being issued by the CMA or the Gambling Commission, to secure improved compliance across the remote gambling sector.”
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