The Gambling Commission recently updated its guidance for gambling operators about fair and transparent terms and practices.

It says that some operators (licensees) are using terms that are potentially unfair and, in some cases, give them undue discretion to decide if and how they are applied. It gives some examples, which include:

  • terms that allow licensees to confiscate customers' un-staked deposits;
  • terms regarding treatment of customers' funds where a licensee believes there has been illegal, irregular or fraudulent play;
  • promotions for online games that have terms entitling a licensee to void real money winnings if a customer inadvertently breaks staking rules; and
  • terms that unfairly permit licensees to reduce potential winnings on open bets.

The Commission also says that it has come across terms and conditions that are difficult to understand; as well as welcome bonus offers and wagering requirements which may encourage excessive play.

In light of these findings, it says that gambling operators should review their terms and conditions to make sure they comply with the Consumer Protection from Unfair Trading Regulations, the Consumer Rights Act 2015, and the Licence Conditions and Codes of Practice (LCCP) as well as taking into account the Commission's updated guidance. It is an LCCP requirement that licensees must be able to provide evidence to show how their terms are fair and transparent.  The Gambling Commission's guidance takes into account the CMA action in relation to remote gambling in 2018, when the CMA produced its own guidance.

The Commission says that gambling operators should also review their offers, particularly welcome bonus offers or those with wagering requirements. The LCCP requires rewards and bonuses to be constructed in a way that is socially responsible. Although it is common practice to attach terms and conditions to bonus offers, the Commission does not expect conditions, such as wagering requirements, to encourage excessive play.

If a consumer is not satisfied with a licensee's response to a complaint they've made, they can refer it to an alternative dispute resolution provider. The Commission has evidence of obstructive behaviour when providers attempt to adjudicate on disputes of this nature. The Commission expects ADR providers to adjudicate on contractual and transactional disputes between consumers and licensees. It has also produced guidance for ADR providers which makes clear that licensees must consider consumer protection legislation when looking at disputes. This includes, for example, considering whether a contract term is fair.

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