Several online gambling firms are being targeted by the UK’s Competition and Markets Authority (CMA) for unfairly placing restrictions on gamblers’ ability to withdraw all or part of their balances.

The joint crackdown by the CMA and the UK Gambling Commission regarding these sites’ predatory marketing practices began with a public call for the industry to voluntarily clean up its act – a call which some firms appear to have not heeded.

While the companies have not been named thus far, that is likely to change. The announcement regarding the ongoing investigations may well be a metaphorical shot over the bow targeting certain companies resisting change.

Previously, in early February, the CMA and the Gambling Commission jointly announced that three major UK-facing firms had reached agreements with the CMA regarding similar unfair practices. Those three firms – William Hill, Ladbrokes, and PT Entertainment Services (parent company of the TitanBet brands) – each signed a formal commitment undertaking that they would bring their companies’ online practices into alignment with the UK’s consumer-protection laws.

At best, the “several” firms under continuing investigation by the CMA will be induced to sign similar undertakings. The alternative, should any of the unnamed firms remain recalcitrant, is a likely referral to the Gambling Commission for possible enforcement action. The CMA itself lacks that direct enforcement authority but conducts the initial investigation in all such matters.

Obstacles ‘to impede withdrawal of funds’

The CMA’s update notes the agency’s “particular concern” in three areas:

• Daily, weekly or monthly limits on withdrawing funds that appear unreasonably low
• Potentially arbitrary short deadlines on the time customers have to verify their identity as a condition of withdrawing funds, sometimes providing for forfeiture of consumer’s funds if missed
• “Dormancy” terms that allow firms to confiscate funds after a certain period of inactivity

Ian Angus, Programme Director at the Gambling Commission said: “We support the CMA’s investigation – gambling firms should not be placing unreasonable restrictions on when and how consumers can withdraw money from their online gambling accounts. While the CMA continues its enquiry, we expect all online operators to look closely at the terms and practices they have in place and consider if they are fair on their customers.”

Thursday’s notice offered little further detail about the specifics of the ongoing investigation. The joint CMA/UKGC crackdown dates back to 2016 and was spurred by an increase in consumer complaints about many of the promotional and marketing practices being used by some sites.

Last year, following a lengthy public-comment period, the CMA detailed five examples of such alleged unfair marketing behaviour:

• Terms preventing players from withdrawing any money they have deposited in their account unless they have wagered its value through in full once, or several times
• Requirements for players to take part in publicity or advertising activity for a firm before the player can withdraw their winnings, for example, by posing for a photo with a “winner’s cheque” which is then displayed on the firm’s website
• Unreasonably high minimum withdrawal limits, for example, someone might add a ￡5 deposit but the minimum they can withdraw is ￡25, so they have to win five times their original deposit before they can take out their winnings
• Daily, weekly or monthly withdrawal limits that appear unreasonably low, for example, compared to the amount that can be deposited and bet over the same period, so someone might have won ￡10,000, but can only withdraw ￡1,000 a week
• Terms that place arbitrary deadlines on the time given to players to provide information to verify their identity as a condition of withdrawal

Voluntary compliance

The undertakings signed by William Hill, Ladbrokes, and PT Entertainment dealt with the above topics and more while omitting specific monetary references. The detailed seven-page committals were identical for each of the three firms, save for the company’s own name.

They were also designed to serve as an instructional template for all UK-facing companies, highlighting what must be repaired in these areas to bring any such site into compliance.

The CMA and Gambling Commission continue to prod online sites into correcting some of these unfair practices in a voluntary manner. Whether that leads to formal enforcement actions still remains to be seen.

The Gambling Commission has shown it will take that step if necessary, as demonstrated by the many fines levied against betting firms who lacked due diligence regarding proper KYC (Know Your Customer) safeguards.

As with the unfair marketing practices, it’s an area where the industry has damaged its self-image and continues to be prodded by the UKGC and CMA to improve its act.