The competition regulator plans to take
action against some online gambling companies which it thinks are breaking
consumer law.
The Competition and Markets Authority
(CMA) said some punters did not get the deal they expected from sign-up
promotions that were offering cash bonuses to attract them to gaming websites.
The CMA also said the firms were "unfairly holding onto people's
money."
Nisha Arora, the CMA’s Director for
Consumer Enforcement said: "New customers are being enticed by tempting
promotions only to find the dice are loaded against them. And players can find
a whole host of hurdles in their way when they want to withdraw their
money."
The CMA launched its investigation
into the gambling sector in October 2016. It has since heard from around 800
unhappy customers and as a result it has identified a number of operators
engaging in practices that are likely to be breaking consumer law.
The controversial promotions involve
terms and conditions which prevent gamblers from walking away with their
winnings at the point of their choosing. For example, someone might bet £20 of
their own money which is then matched by £20 from the online betting company.
However, in the terms and conditions
of play it might state that the customer has to play several hundred times
within a certain period of time before they can cash-in their winnings.
In some cases, under these 'wagering
requirements' people have amassed winnings of several thousand pounds, but have
had to keep on betting, increasing the chances of them losing their money. In
other words, they don't have the choice to quit while they're ahead and walk
away with their winnings.
The Remote Gambling Association (RGA)
said "If there are generic lessons to be learned then, as ever, we will
work with the Gambling Commission to bring those to the attention of the wider
industry with a view to raising standards across the board."
Initially the CMA is talking to the
companies involved, which it says it cannot name, demanding that they change
their practices. If they do not meet the requirements, the CMA can take them to
court. The court could fine the companies or revoke their licences.
The Gambling Commission has been
working alongside the CMA on the investigation. It said identity checks were an
"important duty" for the gambling industry to "prevent money
laundering and to ensure responsible gambling".
But, it added, concerns had been
raised that some operators might be "applying these requirements in a
restrictive way, preventing consumers from legitimately withdrawing funds from
their gambling accounts".
The online gambling sector has grown
massively in recent years, increasing by about 150% since 2009. The sector is
now worth £4.5 billion and the CMA estimate that more than 6.5 million people
regularly use these online gambling sites.