The Gambling Commission has issued a statement setting out its expectations of licensees who leave the British market. The statement applies to online and high street gambling businesses choosing to leave the British market, whether as a strategic choice or where the exit arises as a result of insolvency. It also applies to individuals holding personal management licences.
The Commission states that such licensees should maintain robust policies to safeguard the interests of consumers. In the statement the Commission said: “Even where a business becomes insolvent, we still may act against both the operating licensee and any relevant personal management licensees if there have been failings. We will also consider a licensee’s conduct in any future licence application they make. If we consider there has been wrongdoing, such as fraud or illegal trading, we can refer this to the relevant enforcement agency.”
The Commission’s key expectation is that all licensees implement systems to monitor their liabilities (particularly in respect of long-term bets and funds deposited by consumers) and take precautions to make sure consumers are not unnecessarily disadvantaged in the event of the licensee becoming insolvent or exiting the British market. The Commission says:
“On an ongoing basis, we expect businesses to do the following:
- Be aware of their liabilities and check they can cover these;
- Warn consumers placing long-term bets that their stakes and winnings are not secured in the event of insolvency; and
- Give consumers information about the level of funds protection in place. This is a requirement of our licence conditions (Section 4).
If the business decides to close, we expect them to do the following:
- Provide clear and concise information to consumers.
- Show they are in control of the situation by keeping consumers updated and giving information on any potential routes for redress. Communication should include all available means including direct contact and wider messages on social media.
- Discharge all their liabilities to their consumers whenever possible.”
The Commission also advised licensees to formulate an exit plan in the event of closure which should provide details on how and when it will be executed, including: the date of closure, the extent of the closure, when the licensee will cease accepting bets, a clear and fair policy on how unsettled “ante-post” bets will be handled, how the licensee will communicate with its consumers and how consumers’ money will be returned.
Consumers were also advised to familiarise themselves with the key terms and conditions of any gambling business they engage with, particularly in relation to how their deposits and account balances are protected and what the dispute resolution procedure is. The Commission reminded consumers that it will not arbitrate on disputes arising between a licensee and its consumers.
The Commission’s statement follows a few examples of licensees closing down and leaving punters dissatisfied. One of the most recent examples of this was BetBright, which closed down in March 2019 after selling its technology stack to 888 for £15m and announced it was voiding all outstanding bets a week before the Cheltenham Festival. The company was not in insolvency at the time but reportedly told the Commission that there was a “very real possibility of going into insolvent liquidation if it remained open”. Many punters were furious, and a number of commentators were surprised that the Commission claimed to be “content” with the way the situation had been handled. The Commission in this case conceded that it was powerless to compel BetBright to continue trading and so the voiding of bets and return of stakes was “the best option available for the vast majority of customers in what is an unusual and difficult situation.”
It is interesting to note that, despite this case, the Commission’s advice on the handling of unsettled ante-post bets is somewhat vague. The statement simply says they expect licensees to discharge all their liabilities to customers “whenever possible” and that, in an insolvency situation, the Commission expects licensees to “have considered what outcome is best for the majority of customers”.
Co-authored by Rahul Gandhi.