In a joint letter, the Competition and Markets Authority (CMA) and the Gambling Commission confirmed last week that the CMA investigation into the online gambling sector has concluded.

The investigation, which began in October 2016, concerned suspected breaches of consumer protection law across the remote gambling industry in Great Britain and identified “significant shortcomings”. It resulted in the CMA obtaining written undertakings from six operators: Ladbrokes, William Hill, PT Entertainment, BGO, Jumpman Gaming and Progress Play. As part of the undertakings, the operators committed to cease certain practices, which the CMA considered “unfair” or otherwise contrary to consumer law.

The investigation ultimately focused on the following terms and practices:

  • Lack of transparency regarding restrictions which apply to free bet and bonus offers (e.g. wagering requirements)
  • Restrictions on withdrawing unspent deposits and deposit winnings
  • Fairness and transparency of play restrictions, and disproportionate sanctions for breach of them
  • Removing free bets or reducing their value
  • Terms which allowed operators to use winners’ personal data for publicity, without the individual’s specific consent
  • Terms allowing operators to vary the terms of a promotion after a player had signed up to the promotion
  • The imposition of maximum withdrawal limits
  • Terms allowing operators to remove dormant account funds
  • Terms allowing operators to remove customer funds where the customer does not satisfy ID verification requirements within a certain time period.

Whilst the undertakings were agreed with only a handful of operators, the Gambling Commission made clear it expects all gambling companies to comply with the terms of the undertakings. As a result, the impact of the investigation in relation to the specific issues it concentrated on has been wide-ranging.

The joint letter states: “The findings from this work, and our expectations of you, have been well publicised, and all gambling firms should, by now, have amended their terms and practices to meet the requirements set out in the undertakings.”

In a nod to the success of the investigation, the regulators point out that: “Recent figures from the Independent Betting Adjudication Service highlighted a significant reduction in the number of disputes raised by consumers over bonuses and other promotions”.

The joint letter makes clear that the CMA does not intend to take any further action in connection with the investigation and that it will now be the Gambling Commission leading the charge to ensure the remote gambling sector is compliant with consumer protection law. Although the letter goes on to say “it is not the end of [the CMA’s] relationship with the Commission or its interest in the sector. The CMA will continue to work with and support the Commission as it progresses its compliance work, and as it continues to tackle unfair terms and practices to ensure the fair treatment of consumers”.

Any operators thinking that the CMA stepping back is good news are reminded that, in October 2018, the Gambling Commission amended the Licence Conditions and Codes of Practice to enable it to levy its full armoury of powers against operators who breach consumer protection law. This has prompted some to comment that the Gambling Commission appears to be overstepping its regulatory remit by arming itself with powers which far exceed those of the primary regulator. The sanctions available to the Gambling Commission in theory include the power to levy unlimited fines, as well as being able to revoke an operator’s licence. Revocation of a licence would mean the gambling operator was no longer able to operate in Great Britain.

The joint letter doesn’t miss the opportunity to gently remind operators of this ultimate sanction: “The Commission will continue to look at how firms treat consumers and the terms and practices that they employ when assessing suitability to hold a gambling licence.”

The joint letter also contains the following guidance for the sector: “for you to comply fully with your consumer law and licensing responsibilities, you must go further than simply complying with the published undertakings. You need to audit all your terms and conditions, examine your business systems and practices, embed compliance and, importantly, continually review these to ensure that you maintain high standards of consumer protection in the future. To be compliant also requires critical scrutiny of the practices of those that you deal with, including affiliates and third-party suppliers of systems, software and call centres, as you are responsible for their actions in accordance with the Commission’s Licence conditions and codes of practice (LCCP).”

Given the stakes, operators would be well-advised to act accordingly.