The announcement by the CMA of an investigation into online gambling firms 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 CMA issued Information Notices under consumer protection legislation on 21 October, 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 the CMA with further material.
Nisha Arora, CMA Senior Director for Consumer Enforcement, 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.
Around 5.5 million Britons gamble online and they must be treated fairly. We’ve heard worrying complaints suggesting people may be lured into signing up for promotions with little chance of winning because of unfair and complex conditions. We’re now working closely with the Gambling Commission to examine this more closely’.
Sarah Harrison, Gambling Commission Chief Executive, added:
‘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.
Gambling, by its very nature, is always going to involve risk but customers must have faith that if they win, they will not end up feeling that the deck is stacked against them because of an obscure condition that they did not properly understand.
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.’
Online gambling has grown by around 146% since 2009 and now more than 5.5 million people regularly log on to sports betting, gaming and casinos using gambling websites. The initial CMA review of the £4 billion-a-year sector has highlighted examples of potentially unfair treatment that require more comprehensive examination. In particular, the CMA is concerned that players may be losing out as a result of:
· 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.
· 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.
This investigation is part of a joint programme of work between the CMA and the Gambling Commission to tackle issues around fairness and transparency in the gambling industry. 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.
