Industry reacts to CMA enforcement action

The online gambling industry received a shot across the bows this morning, with news that “several” operators would face enforcement action from the CMA over their terms and conditions which may breach consumer law.

The regulatory watchdog, along with the Gambling Commission, also announced a new investigation into checks on withdrawals, prompting concerns over yet more enforcement action.

What that enforcement action will look like and who is in the firing line is still under wraps, but the CMA has undoubtedly caught the industry’s attention with its announcement this morning.

Here’s what key stakeholders had to say:

Remote Gambling Association: “The CMA has not been in contact with the RGA since it began its investigation last year and so it will obviously take us some time to digest and consider properly its announcement today.  However, where failings are identified companies individually will rectify them.  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.”

Goodbody: “At this point in time, it is very difficult to know which specific operators this enforcement action could relate to, how many operators it relates to and what particular action those operators may face.

What is clear is that this appears to be yet another escalation in the negative regulatory pressure on the sector in the UK. A clampdown on certain practices that are perceived as unfair by customers may be good for the public sentiment towards the industry in the long run. However, in the near term it creates further uncertainty around potential fines and/or eventual changes to practices for online operators.”

Dan Waugh, Regulus Partners: “This is shaping up to be a summer of discontent for Britain’s gambling industry. This week’s announcements from the FA and the CMA suggest a further tightening of the commercial environment – and we are not finished yet. The ICO investigation and DCMS review may well contain further bad news for gambling operators. No-one who has been watching events over recent years should be surprised at what is happening to the industry. In the short term, operators will want to limit damage – but serious thought should be given to long-term plans to break the current cycle of negativity.”

Paul Fairhead, fair gambling campaigner: “Today’s announcement by the CMA could prove to be a watershed moment for the gambling industry. I’m delighted to hear that enforcement action in the shape of fines will follow, and hopefully this will act as a wake up call to the industry that punters should have the same rights as all other consumers to be treated fairly.

For too long, gambling firms have pointed to T&Cs, some of which I believe may be unlawful, as a way to deny punters their winnings, so to hear the CMA confirm that they think likewise is very pleasing.

Andy Danson, partner, Bird & Bird LLP: “Today’s announcement is unlikely to come as a surprise to the industry, but there are a couple of important points to note.

“Firstly, there are often good reasons why operators must impose particular conditions in order to be able to offer bonuses and other advantages to customers. If the CMA and Gambling Commission take a particularly hard line (which seems not unlikely given the tone of today’s announcement), it will almost certainly result in a less attractive offering for consumers, particularly when combined with forthcoming changes to the taxation of bonuses.

“Secondly, only the courts, and not the CMA or the Gambling Commission, can determine definitively whether or not consumer legislation has been breached. If the industry does not accept the regulators’ interpretation of the law in all areas, the courts may be invited to do just that.”

Liam Casey, consultant, BetonExperts: “Its regulatory sabre rattling by the CMA and the UKGC working in tandem.

“The online gambling space is still very young in global industry terms. It’s only moving into adulthood now at 21. (Intertops & Intercasino being first in 1996). If you compare it to banking or finance, there’s a massive way to go with regulation before there are established global guidelines for market operators.

Regulation (in any industry) tends to be of benefit to the market incumbents – as it’s simply a cost of doing business. I’d be 90% certain that the CMA would find it virtually impossible to prove their claim that “customers were sometimes forced to play hundreds of times before they were allowed to withdraw money, denying them the choice to ‘quit while they’re ahead’”

It’s a shot across the bows – that we may see a couple of mid/lower tier operators slapped on the wrist.

Brian Chappell, from Justice for Punters warned that enforcement action and investigations would continue to hit the industry unless it overhauled its approach.

“Just change and we will go away,” said Chappell. “None of us are anti-gambling, we are all punters who want a fair shake.

“We appreciate how competitive the online market is, it’s arguably broken, but that doesn’t give you the right to treat customers poorly. We simply want customers to be treated the way they would be in Mark & Spencer or any other business.

“The CMA looked at this and came to the same conclusions as us, and unless the industry changes there will be more to come.”

Warwick Bartlett, CEO of Global Betting and Gaming Consultants: “As a punter I have often found bonus play confusing but there is a simple solution.  I bet with those that pay out quickly, and I reject bonus offers.  I am probably turning down some good offers, but I find them a distraction to the clear thinking which is a requirement if you hope to come out in front.

“The danger with investigations such as these is that they will eventually remove what separates one firm from another.  The offer will become standardised, and that in itself is anti-competitive because it plays into the hands of those that can spend money on brand.  Isn’t that what has happened in the betting shops? We now see very little that separates one shop from another on the high street, same menu of betting opportunities, same odds, same product, boring! “