Online gambling operators being scrutinised for compliance with UK consumer protection rules

Out-Law News | 25 Oct 2016 | 10:25 am | 1 min. read

An investigation into online gambling operators' compliance with UK consumer protection rules has been opened by the Competition and Markets Authority (CMA).  

The regulator has used powers set out in the UK's Consumer Rights Act to serve information notices on businesses operating in the online gambling market in Great Britain.

The notices "demand" that the gambling operators share with the CMA "information about their use of potentially unfair terms and misleading practices" and come after some consumers raised complaints about bets being cancelled, odds being altered after bets have been accepted and "misleading sign-up promotions", the Gambling Commission said. The Commission raised the issues with the CMA to prompt the CMA's investigation.

Gambling law expert Christopher Rees-Gay of Pinsent Masons, the law firm behind Out-Law.com, said: "Online or remote gambling is a rapidly expanding market for operators. This investigation is aimed at making sure operators are promoting the licensing objective of ‘ensuring that gambling is conducted in a fair and open way’, as set out in Section 1 of the Gambling Act." 

"Those operators that fall short of this required standard, by having unclear or misleading terms can expect enforcement action, including the possibility of having their operating licences reviewed by the Gambling Commission. It is vital for consumer confidence and the wider industry itself to ensure that online gambling is conducted in a fair and open way," he said.

In a statement the Gambling Commission chief executive Sarah Harrison said that she has concerns that some online gambling operators "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.," Harrison said. "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."

In a statement the CMA gave examples of the types of concerns that its investigation will look more deeply into. These include in relation to contracts terms some operators use in gaming promotions and the fairness of terms they rely on to "cancel bets or alter odds after bets have been accepted, because they made a mistake when the odds were first set". Restrictions on consumers' ability to challenge operators' decisions will also be scrutinised, the CMA said.

Nisha Arora, CMA senior director for consumer enforcement, said: "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."