Has Stricter Regulation Had a Positive Effect Overall?

Recently, the UK Gambling Commission has begun taking action against what it deems to be unfair practises, with regards to terms and conditions in the UK gambling industry. More specifically, they have been concerned with the terms of casino bonus offers. Everyone is familiar with the bonus offers offered by casinos; they might offer you a certain amount of extra credit for signing up on the site or they might give you free spins on a Slots game.

Many players have criticised these bonus offers for having terms and conditions that are incredibly difficult to understand. If you fail to read the terms and conditions for a casino bonus offer carefully, you could end up losing out completely due to a technicality. The UK Gambling Commission agrees that these offers are too complex, so they have implemented new regulations that restrict exactly how online casinos can promote themselves.

These regulations are not only intended to make things easier to understand for the players, but they are also meant to ensure bonus offers are fairer. We think that these measures will improve the player experience by making things easier to understand.

Background

In November 2017, online gambling firms were warned by the UK Gambling Commission that they needed to review their terms and conditions, particularly in relation to bonus offers. The UK Gambling Commission, in conjunction with the Advertising Standards Authority (ASA) had determined many casino firms might be breaking consumer protection laws by having unfair promotional offers.

The main problems were that the terms and conditions surrounding bonus offers were not depicted clearly and concisely, and also in some cases, customers’ rights were infringed upon when they were unable to access their winnings.

Here are the UK Gambling Commission's concerns in full:

  • Customers were not always able to withdraw from their deposit balance or from their winnings
  • Customers were not able to easily distinguish between play using their bonus balance and play using their deposit balance
  • Promotion play restrictions which are not made clear to the players
  • Significant terms and conditions not being prominently displayed, and not being depicted to the players in a clear and concise fashion
  • Operators not honouring free bets despite players meeting the conditions
  • Assuming players’ consent to using their personal information for promotional purposes

What changes were made?

As part of a joint operation with the Competition and Markets Authority, the UK Gambling Commission took a stand against unfair terms and conditions. In response to this crackdown, many of the major UK gambling operators fully committed to changing how they handle their bonus offers.

In response to the investigation, firms such as Ladbrokes, William Hill, and PT Entertainment promised to make the following changes to their services:

  • Players no longer need to play multiple times before they are able to withdraw their own money
  • Any restrictions must be made 100% clear to players. Operators can no longer rely on vague wording in order to seize players’ money
  • Operators can’t force players to take part in any kind of publicity exercise

Note From The Editor

Fear of reprisals from regulators has led to several of the casinos we work with to cease offering bonuses to UK players. Operators are held wholly responsible for all of their offers, even when they are advertised on other websites such as ours, so it's not surprising to us. By not offering bonuses at all, they avoid the risk of being hit with some very large fines - not to mention the damage to their reputation.

- Alex Tester, CasinoGuide

Pros and cons of the current regulations

For the players

Pros:

  • Bonus terms are now much clearer and easier to understand
  • As a result of being more transparent, bonus terms are often a lot more lenient than before
  • No more requirements to take part in promotional material in order to claim your win

Cons:

  • Less bonus offers to take advantage of as casinos are more likely to 'play it safe'

For the casinos

Pros:

  • How the law needs to be implemented is now clearer
  • Encourages them to be more trustworthy and transparent

Cons:

  • The main method of promotion towards new players is now a lot more difficult
  • Could potentially lead to decreased profits
  • Risk of large fines

How much power does the UK Gambling Commission have?

So how can the UK Gambling Commission enforce these changes? As the official regulator reporting directly to the UK Government hey have the power to issue large fines if regulations are not properly followed. For example, GVC Holdings were fined £350,000 for "repeatedly misleading consumers" by running adverts relating to "free" bonuses. In fact, between May 2017 and April 2018, the UK Gambling Commission issued total fines to the tune of over £18,000,000.

Not only can the UK Gambling Commission issue huge fines, but they also have the power to revoke an operator’s licence entirely. In a market as profitable as the UK, losing a licence to operate could have a devastating effect, even if it is just for a short amount of time.

Alternatives

Of course, the alternative to having such tight regulations for the gambling industry would be to relax the gambling laws and allow it to regulate itself. This would probably be good for gambling industry profits, but there is plenty of evidence that it wouldn’t be good for the average player. A lack of regulation in the gambling industry almost always results in predatory practices from casino operators.

It’s possible to witness some of these practices firsthand if you play on unregulated offshore gambling sites. For example, these sites are notorious for delaying payouts in the hopes that the player will lose more of their money.

They might also only allow you to withdraw your funds in tiny amounts at a time. Additionally, they might have rigged random number generators which work in favour of the house and non-existent customer service. The auditor eCOGRA was founded by Microgaming in order to provide some certainty in this regard.

When you see how some casinos operate, it’s easy to see why such regulations are necessary.

Proposed solution

When it comes to gambling regulation, we think there needs to be a good middle ground. Predatory practices are a problem within the gambling industry and everything should be done to eliminate them. With that being said, excessive regulation can inhibit innovation and make the experience of playing on an online casino less enjoyable.

We think that casinos have a responsibility to do all they can to mitigate the societal harms that might be caused by gambling. Self-exclusion, betting limits, time limits - these are all good features that online casinos should be offering. The measures now in place, preventing casino operators from tricking players by making their terms and conditions inaccessible or difficult to understand, are a good start.

Most of the regulations that have been focused on in the last year have resulted in a better experience for the average player. If you compare UK bonus offers to foreign ones, you will now see the UK-based casinos are displaying their terms much more prominently. It’s easier to avoid losing out on your winnings due to technicalities.

The UK is one of the biggest and the best gambling markets in the world, so it is important that regulation does not become so excessive that it causes casino operators to move their operations out of the country.

Recommendation

We think that the UK Gambling Commission is currently doing a fairly good job of looking after the players while still maintaining the competitiveness of the UK gambling industry. Care has to be taken to ensure regulations do not stifle innovation.

For example, many casinos are now experimenting with running live casino games using virtual reality headsets. Virtual reality headsets such as the Oculus Rift are technically considered to be games consoles, so could these new VR casinos fall foul of regulations prohibiting the promotion of gambling to children? In this kind of situation, we feel casino operators should be given the freedom to innovate.

At the moment, it seems like the UK Gambling Commission is doing a good job of finding a balance between protecting the players and excessive regulation. Most of the regulatory focus in the last year has made the UK a better gambling environment for players. It’s now a lot easier to determine the exact terms and conditions that are associated with bonus offers. This means it is less likely that you will miss out on bonuses you have worked towards.

We think the UK gambling industry should take measures to avoid excessive regulation. The measure taken by the UK Gambling Commission over the last year would not have been necessary had casino operators been more transparent about their bonus offers.

The more player-friendly the UK gambling industry is, the less bad press they will get. If the gambling industry has a good reputation, there will be less pressure on the UK Gambling Commission to create more rules and regulations. This will ensure the gambling industry in the UK has the freedom it needs to innovate and stay competitive on a global scale.