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CMA clamps down on unfair gambling promotions

01 February 2018. Published by Jeremy Drew, Partner and Stuart Harris, Associate

The CMA has spoken: online gambling operators must act now to avoid falling foul of misleading terms and practices. See below for our list of dos and don’ts.

Following the CMA’s investigation into the promotional practices of online gambling operators, three major players (Ladbrokes, William Hill and PT Entertainment (owner of Titanbet and winner.co.uk)) have formally committed to running clearer bonus promotions and ensuring that players can always access and release their own money. The rest of the market must now follow suit, or risk possible regulatory action.

The investigation was prompted by concerns that operators in the sector were breaching consumer laws, including the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Rights Act 2015.

The CMA found that certain terms in these promotions were likely to be ‘unfair’, in breach of consumer protection law, and could mislead consumers. Promotions under particular scrutiny are those designed to attract players to casino-style websites by offering bonus funds when players put in their own money, for example: “Put down £10, and get £50 to play with!”. The CMA was particularly concerned that people could be made to play for longer than they had bargained for before being able to withdraw their own money.

What should operators be doing?

The Gambling Commission has made clear that operators across the sector must promptly adopt similar changes to those identified, or risk possible regulatory action. Operators are therefore advised to consider the following dos and don’ts:

Do:

  • Clearly and promptly communicate the significant terms and conditions of all promotions so customers can make an informed decision about whether to participate. Significant terms might include restrictions on gameplay, such as eligibility restrictions, time limits, minimum deposits, maximum bonuses, maximum stakes etc.

  • Regularly review terms, practices and marketing collateral to ensure that they are fair and comply with consumer law and advertising regulations.

  • Maintain a proper approval process for signing off on copy (which includes legal review).

  • Ensure customers can:

    • exit promotions at any time and extract their remaining deposit plus any winnings from wagers made with deposit funds; and

    • clearly distinguish between playing with bonus funds versus their own money. This could be achieved with pop-ups / communications such as “You are now using bonus funds from us. Once you use these up and any winnings from them, you will be playing with your own money.

  • Explain clearly if there are limitations on the amount of money that a customer can withdraw in one tranche.

Don’t:

  • Attach complicated or unfair play restrictions to customer deposits (for example forcing players to withdraw prize money in small instalments over a long period of time).

  • Rely on vague / hidden terms to confiscate players’ money.

  • Deny customers access to their own money - including deposits and winnings earned from customer deposits.

  • Change ‘live’ promotions once customers have started playing.

  • Impose terms which allow customer funds to be confiscated if they haven’t played for a few months.

  • Require customers to take part in compulsory publicity / marketing activity.

  • Use customer names, photos, locations or other personal data for promotional purposes unless you have their explicit consent to do so.

RPC's Sports team regularly advises clients on gambling matters, including consumer law and marketing / advertising regulation.  For more information, please contact Stuart Harris (Associate) or Jeremy Drew (Partner).