Online companies required to review terms and conditions

In October of last year, the CMA commenced an investigation into the practices and consumer terms of online gambling companies and whether they are treating their customers fairly (see our note on this here). This June, as a result of its investigation, the CMA announced that it was commencing enforcement action against certain online gambling companies (see here). It is not known exactly how many companies are involved in this enforcement action – it has been reported as five - but the only two companies who have confirmed that they are the subject of enforcement proceedings are Ladbrokes Coral and William Hill.

The CMA’s enforcement activity is continuing and it has requested undertakings from the companies concerned and, depending on the responses it receives to those requests, the regulator will consider in mid-December whether to commence court proceedings. However, despite enforcement not yet coming to an end, at the Gambling Commission’s Raising Standards conference last week, the CMA announced its conclusions on various categories of consumer term that were scrutinised as part of the investigation. As part of the joint programme of work between the CMA and Gambling Commission, the Gambling Commission has also called upon all operators to review their terms and conditions – and not just those identified in last week’s presentation – for compliance with consumer law.

The full CMA speech is available here but the six main areas addressed by the CMA were:

1. The lack of transparency provided in respect of the significant restrictions and conditions that apply to a promotion, both before and after the consumer signs-up for the applicable promotion;
2. Restrictions on consumers’ ability to withdraw winnings generated from deposits made as part of a promotion until the applicable wagering requirements are met;
3. Restrictions imposed on consumers’ withdrawal of unspent deposit funds;
4. The fairness and transparency of restrictions that apply to a consumer’s gameplay (for example bonus abuse terms);
5. Reducing the value of free bets, or withdrawing them altogether, after awarding them to consumers; and
6. Terms which deem a consumer, merely by accepting the gambling operator’s terms and conditions, to have consented to use of his/her personal information for promotional means.

In addition, the CMA outlined a further line of investigation that they commenced in the Summer relating to general restrictions placed on consumers withdrawing funds, dormant accounts and the use of minimum withdrawal limits. The CMA said that they are still scoping that piece of work and are contemplating a further round of enforcement activity next year.

At the conference, the Commission representative stated that operators are expected to take “immediate steps” to ensure that their terms and conditions are compliant even though no undertakings have been published by CMA. The Commission did say that there would be a question and answer session at some point in the New Year and that they would publish guidance once the CMA’s work is complete, but the position of the CMA and Commission has been made clear and that operators should not wait for guidance before reviewing and, if necessary, changing their terms. The Commission has followed up this warning to licensees with this release (which includes a video and slides of the CMA’s presentation).

CMS has extensive experience of advising on consumer law issues and CMA actions, and particular expertise in the gambling sector. If you require any assistance in reviewing and amending or re-drafting your consumer-facing terms, please contact David Zeffman at [email protected] or 0207 067 3198.