LONDON — The UK’s competition watchdog is investigating gambling operators on concerns they are “unfairly holding on to people’s money.”
The Competition and Markets Authority (CMA) is probing whether the companies are misleading consumers with special sign-up promotions.
The investigation opened in October, prompted by concerns from the Gambling Commission about whether gambling websites were complying with consumer protection laws.
“The gambling industry should be under no illusion that if they don’t comply with consumer law, we will see this as a breach of their operating licence, and take decisive action,” said Sarah Harrison, chief executive of the Gambling Commission.
Sign-up promotions lure people into online casinos and gambling sites by promising good odds, free bets and cash prizes. But regulators are worried that these winnings are often subject to terms and conditions that customers are unaware of when signing up. One such condition is that a customer must play a lot of games before being allowed to withdraw any money – which increases the chance of developing a gambling addiction.
The gambling industry in the UK is worth an estimated £4.5billion.
Another complaint made to the CMA is that the minimum withdrawal a customer can make is sometimes far higher than the amount of money they initially put in.
Concerns about gambling addictions have grown over the past year, prompting the government to announce a review of fixed odds betting terminals (FOBT). FOBTs are a significant source of revenue for high street betting shops, but have been heavily criticised as highly addictive and a dangerous drain on people’s money: they allow customers to pay up to £100 every 20 seconds, which can lead to huge losses.
“We know online gambling is always going to be risky, but firms must also play fair. People should get the deal they’re expecting if they sign up to a promotion, and be able to walk away with their money when they want to,” said Nisha Arora, senior director for customer enforcement at the CMA.
“Sadly, we have heard this isn’t always the case. 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,” she said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.