February 1, 2018

Following an investigation by the Competition and Markets Authority (CMA) to tackle transparency and fairness, all online gambling operators must review their terms and practices and change them as required.

The CMA launched its investigation, in collaboration with the Gambling Commission, after concerns around operators’ compliance with laws on consumer protection, designed to prevent unfair commercial practices, in particular misleading acts or omissions. The Consumer Rights Act, which came into force in 2015, has a particular focus on the transparency of customer terms and conditions. Gambling operators run frequent and numerous promotions – often offering bonus funds when players deposit their own money. Whilst these are not uncommon, the specific terms on which money can be withdrawn vary considerably between operators, as well as from one promotion to the next, and the transparency and fairness of the terms of these has been scrutinised.

Today, the CMA announced that three leading operators have agreed to certain undertakings with the CMA, designed to ensure that the terms on which players interact with these operators will not breach consumer protection laws. As well as undertaking that all significant conditions are clear and accessible, the CMA has asked for specific guarantees to ensure that, amongst other things:

• the way in which deposits and deposit winnings can be withdrawn are fair;
• any restrictions on promotional play are clearly set out and any that customers are briefed when any of those terms are breached; and
• free bet promotions in sports betting are properly run, including specific processes to deal with account restrictions on free bets (i.e. any restrictions placed on accounts that restrict or reduce a customer’s ability to receive free bets).

To ensure that terms and conditions in online promotions are clear and not misleading, all significant terms must be prominent, within the advert and within the headline offer on all relevant landing pages and sign-up pages. The CMA has also stated that all significant terms must be shown within the advertising wherever it is displayed, except where it is not possible to do so due to significant limitations on time and/or space in that advertising medium. The full terms and conditions relating to a promotion, including those relating to bonuses, must be accessible before the customer signs up:

1. on all relevant landing/sign-up pages; and
2. within a single click from any advertising, as well as within a single click from the bonus tab on a customer’s account/home page.

Whilst these rules are not a huge departure from expected practices in place before the CMA’s investigation, operators were clearly presenting offers and promotional terms in a misleading way. It is now clear that even where significant terms are provided one click away, this is not going to fly unless there is a really good reason that they can’t all be presented within the advert. Remember, significant terms are those key restrictions that are likely to affect a customer’s understanding of a promotion – these will vary between each promotion but include things like:

• whether or not anyone is excluded from the promotion;
• any time limitations;
• how to qualify for any bonus (e.g. cash equivalents, deposit matching, free spins and free bets);
• the size of any maximum stake;
• wagering requirements that apply to the withdrawal of any winnings or bonus ;
• promotional play limitations such as restrictions on the size of the bets a consumer can place, on which games they can play and any restrictions in stake size; and
• any cap on winnings.

With this in mind, we can be sure that that the way adverts look will need to change (and/or so will the complexity of the offers).

To ensure operators don’t face enforcement action, the CMA has published some useful dos and don’ts, which operators should action immediately.