HomeInsightsCMA investigation into online gambling

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The Competition and Markets Authority ( CMA) announced in October 2016 that it would be investigating possible unfair terms and practices in the remote gambling sector, following concerns raised by the Gambling Commission of Great Britain that some operators may be breaching consumer law. The Commission has become increasingly irritated by the adverse publicity around operators refusing to pay out punters and the spate of Advertising Standards Authority adjudications which have upheld complaints against the industry’s promotional terms. Both issues have potential gambling regulatory and wider consumer protection implications.

The CMA has also cited a trend within the industry to make complaints procedures obstructive by imposing certain restrictions on how a player can complain and a lack of clarity around what players’ rights actually are.

The CMA’s investigation has focused on concerns raised about the fairness and transparency of:

  • Sign-up promotions for new gaming customers (where offers may include complex wagering requirements which must be satisfied before being eligible to withdraw funds);
  • Free bet promotions, where customers may have qualified for a promotion, but are later told they are no longer eligible to receive the free bet;
  • ‘Palpable’ or ‘obvious’ error terms, which purport to allow operators to retrospectively cancel or revise sports betting odds offered in error;
  • Terms granting operators a wide discretion to determine whether a customer is in breach of contract and allowing operators to impose disproportionate sanctions; and
  • Customer complaints/redress procedures.

The CMA will be looking at how clearly and effectively operators communicate what can often be lengthy terms and conditions and whether the average consumer is able to make a properly informed choice about whether or
not to gamble. To date, the CMA has issued numerous Information Notices under consumer protection legislation requiring evidence from online gambling companies in order to establish whether remedial action is necessary.

The online gambling industry’s contractual relationship with its players is a complex one. It remains subject to gambling regulatory requirements and wider legal/consumer protection requirements whilst the industry seeks to balance those obligations with the need to protect itself commercially. It’s too early to predict what action the CMA will take following its investigation, but it is realistic to expect the CMA to secure undertakings from the investigated operators and for industry guidance to be published by the Commission, which may well take the form of additional or augmented licensing conditions. It remains to be seen whether the CMA will elect to take
any firmer enforcement action against certain industry participants.