The United Kingdom Gambling Commission (UKGC), a regulatory body for the UK gambling market, has published a public notice advising online operators to learn from a 2016 Cheltenham case and ensure that any bonus promotions for customers are entirely fair and transparent.
The regulator stated that operators should take note of “failures” committed by TGP Europe Limited and Fesuge Limited via their sportsbetting websites at Fun88.co.uk, TLCBet.co.uk, 12Bet.com and 138.com.
All four bookies are based in the Isle of Man, and 12Bet, TLCBet and Fun88.are all registered with the Gambling Commission under the same licensee TGP Europe Limited.
The Cheltenham 2016 case
The bookmakers suffered their worst Cheltenham in history after a series of punter-favourable results in the big races of the week.
UKGC declared that the United Kingdom and Isle Of Man-licensed domains had offered bonuses connected with the annual Cheltenham Festival in March 2016 but that approximately 800 customers had complained when their accounts were subsequently suspended due to alleged contraventions of the operators’ specific terms and conditions.
The Gambling Commission found that TGP Europe Limited and Fesuge Limited had suspended over 5,000 accounts after assessing that a large number of bets had been placed in contravention of clause 15.2 of their terms, which stated that they could take such actions if “we suspect that you or any other player is abusing or attempting to abuse a bonus or other promotion or is likely to benefit through such abuse”.
The clause 15.2 gave TGP Europe Limited and Fesuge Limited an unilateral right to declare a punter is in breach of terms and conditions, to end the contract with the customer without further explanation, and to withhold his winnings and close his account, giving him back his deposit.
A a clause such as that one is common practice among online gambling operators and is designed to protect the operator from fradulent activities, in an ongoing arms race between the fraud detection departments and fradulent players. However, it appears the four bookmakers in question have been using this clause to save money on a Cheltenham festival that has been unusually profitable for the punters.
News articles about the Cheltenham free bets scandal:
“Licensees must satisfy themselves that none of the terms on which gambling is offered are unfair terms within the meaning of the Consumer Rights Act of 2015,” read the statement from the Gambling Commission. “The Gambling Commission concluded that TGP Europe Limited and Fesuge Limited failed to satisfy itself as to the fairness of clause 15.2 of its terms, which gave TGP Europe Limited and Fesuge Limited a unilateral right to end the contract with its customers on grounds which were not clearly spelt out. There was also no definition of bonus abuse within the terms.”
In accepting they were at fault, TGP Europe Limited and Fesuge Limited reportedly voluntarily agreed to pay approximately $8,652 to cover the costs of the investigation and make changes to their terms, conditions and business structures under the supervision of newly-employed operations managers while improving anti-fraud and staff training procedures.
Working with Isle Of Man Gambling Supervision Commission
The Gambling Commission revealed that it had worked closely with the Isle Of Man Gambling Supervision Commission and the Competition And Markets Authority in resolving the case while the Independent Betting Adjudication Service had also played a part in the process. Going forward, it stated that operators should ensure that such special bonus offers are fair under the terms of the Consumer Rights Act of 2015 and comply with current laws before providing an accurate summary “in plain and intelligible language” of any “contractual terms on which gambling is offered”.
It also declared that providers should “clearly set out” and make “readily accessible” the circumstances and conditions under which promotions are available while additionally presenting a “clear and transparent” explanation of their position on bonus abuse and how any penalties will be applied.
“We consider that this case provides valuable learning for remote and non-remote operators,” read the notice from the Gambling Commission. “Operators offering bonus promotions in the normal course of business and at major events must ensure that their terms and conditions comply with the requirements of the Consumer Rights Act of 2015 and the [license conditions and codes of practice]. They should take a proactive approach in assessing their policies and procedures to ensure compliance.
Barking at the wrong tree
However, it seems UKGC doesn’t fully understand where the problem is, hence the non-obligatory blanket advice to operators they “should do better” in cases such as this one that made the news and therefore caught the attention of UKGC.
Operators must have an instance they can use to end the contract with fradulent players, and the problem here was that they probably used that instance to gain unfair advantage, though that hasn’t been proven in this case.
Regardless of how transparent the bonus terms and conditions are, the operator will still be able to close accounts. These four ended the contract with numerous customers and gave them their deposit back, as they should.
UKGC are satisfied with rewritten bonus terms and conditions. And here is how 138.com’s general bonus terms and conditions regarding fradulent activity – in a version that UKGC deems transparent – look like now. The operator still reserves the right to do as they please, but in a transparent way.
16.1 Given the nature of the Services, we reserve the right to terminate Your Account at any time. Prior to closure of Your Account you will be notified by email of our decision to terminate Your Account and any Legitimate Winnings and other legitimate sums in Your Account will be returned to you. If following thirty (30) days from the date of our email advising you of the termination of Your Account, you have not withdrawn Your Account balance, a monthly maintenance charge of five pounds sterling (￡5.00) will be applied to Your Account until Your Account balance reaches zero.. During this period Your Account will be suspended and you will not be able to make Bets.
16.2 In addition to other rights available under these Terms and Conditions, we reserve the right, in our sole discretion to:- (i) void any winnings (including Legitimate Winnings); (ii) suspend or terminate Your Account; (iii) terminate these Terms and Conditions with you; and/or (iv) suspend the provision of the Services to you and/or (v) seize all of the funds in your Player Account and to reverse any withdrawals that may be pending in the event that we reasonably determine that:-
(a) you or people living at the same address as you have more than one active account with us;
(b) the name you provided to us does not match the name on the credit or debit card or other payment accounts used to make deposits to Your Account;
(c) you participate in a promotion offered by us but fail to fulfil the requirements of the relevant promotion;
(d) you provide incorrect or misleading registration information;
(e) identification information requested by us was not provided to us;
(f) you are not over the age of 18 or the legal age for participating in Gambling in the jurisdiction in which you reside;
(g) you access and participate in the Services from a jurisdiction where participation in the Services is prohibited by law or we deem (acting reasonably) that such participation is prohibited by law;
(h) you have “charged back” or procured a “charge back” against us or denied any of the transactions or deposits that you made to Your Account;
(i) you have deposited, sought to deposit or we suspect you of handling money originating from criminal or other illegal or unauthorised activities to Your Account;
(j) you have been cheating or attempting to cheat;
(k) you are committing or attempting to commit deception or fraud;
(l) you employ or seek to make use of an artificial intelligence or other system (including machines, computers, algorithms, software or other automated systems) designed specifically to defeat the system operated by us or you are found to have colluded or attempted to collude with other players in order to defraud us (or other Players);
(m) you allow (intentionally or unintentionally) a third party to use Your Account;
(n) you fail to comply with any of the provisions of these Terms and Conditions;
(o) you attempt to conceal your location, including but not limited to, through the use of a Proxy server;
(p) you are located in one of the countries stated in Clause 7.2 (p)