Who: Competition and Markets Authority (“CMA”)
When: 21 October 2016
Law stated as at: 3 November 2016
On 21 October, the CMA announced that it was launching an investigation into whether online gambling firms treat their customers fairly.
Online gambling has grown by around 146% since 2009 and 5.5 million people currently use online gambling sites. This rise in popularity and take-up of online gambling means that it has become a hot topic for both the CMA and the UK Gambling Commission to ensure that the companies are fully compliant with all relevant consumer protection legislation.
The CMA has issued Information Notices, which call for evidence on this problem. This is the first step which the CMA is required to take in order to establish whether or not enforcement action is required under consumer protection legislation.
The CMA highlighted the following concerns with online gambling firms’ existing practices:
- consumer-facing terms which are too complex to allow the majority of consumers to understand the terms on which they are playing;
- consumers are enticed into signing up for a promotion where they have little chance of winning due to unfair and complex conditions;
- consumers are locked into complex promotions and many are required to play for longer than they had originally planned before they are able to withdraw their funds;
- unilateral changes to the betting odds by the online gambling companies after a bet has been accepted (for example, if the company made a mistake when they first set the odds); and
- restricting a consumer’s ability to challenge the company’s decision (for example, through imposing short time limits on making a complaint).
The CMA’s investigation is part of a programme jointly carried out by the CMA and the Gambling Commission to resolve problems in the gambling industry around fairness and transparency. The Gambling Commission used their report earlier this year to call for online gambling companies to place consumer interest at the heart of the gambling industry and increase transparency and fairness in relation to their consumer facing terms.
The CMA are expected to publish an update on the investigation in early 2017.
Why this matters:
Online gambling operators are likely to face increased scruting in light of this investigation and it may even result in enforcement action taken by the CMA against certain companies.
At present, anyone associated with the online gambling industry will have to watch this space for the CMA’s conclusions and for details on the CMA’s next steps. However, this appears to be yet another indication of increased scrutiny and regulation on online gambling offerings.