Why gambling operators need to be fair to customers

Why gambling operators need to be fair to customers

by Melanie Ellis, Senior Associate

by Melanie Ellis, Senior Associate

As all operators targeting customers in Great Britain will be aware, one of the key licensing objectives of the Gambling Act 2005 is “ensuring that gambling is conducted in a fair and open way”. The other two objectives (keeping crime out of gambling and protecting vulnerable persons) are perhaps more straightforward for operators to implement, whilst being “fair and open” is a slightly more esoteric concept.

Being fair and open encompasses all the ways in which operators interact with customers and potential customers. Advertising, terms and conditions and the way that gambling products operate are all relevant here. With so much to consider, there is a risk of operators getting caught up in ensuring compliance with the legislation, licence conditions, advertising codes and technical standards, losing sight of the fact that being fair and open to customers is a worthwhile aim in itself. If advertising, terms and conditions and the way products work are fair and clear, the chances of disputes arising is greatly reduced. In a more general sense, advertising is the public face of gambling and advertisements that leave potential customers confused about what bonus is being offered, for example, create a negative perception of the gambling industry.

The Advertising Standards Authority (the ASA) has looked at a number of complaints recently where it was alleged that the terms of free bet offers were not made clear. In July and August 2016, the ASA ruled on complaints regarding free bet offers from Ladbrokes, Betway and Marathon Bet. All three operators had run advertising which the ASA considered did not make it clear how free bets operated, including how winnings from free bets would be paid out and the deposit requirements to be awarded the free bets. Most recently, on 7 and 14 September 2016 the ASA upheld three separate complaints against Coral regarding emails sent in error, offering sign-up bonuses and free bets. Some customers who tried to take advantage of these offers were told that they had expired, or that they were not eligible for the promotion. The issues were caused by oversights by Coral’s third-party email provider, but in one case the ASA felt that the problem was compounded by Coral then not dealing fairly with the complainant.

It is also key that an operator’s terms and conditions are fair and open and not overly complex. This is of particular importance to the Gambling Commission (“Commission”) and its CEO Sarah Harrison reiterated this to a group of industry stakeholders at ICE earlier this year. If a term is deemed to be unfair, it will not be enforceable and will not bind the customer. The operator would also be in breach of its Commission licence, which has a condition attached requiring that “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 2015 and must comply with those terms.” Operators are also required to comply with the Consumer Rights Act which provides for wide powers of enforcement (including seeking an injunction) and investigation in relation to unfair terms. Dhruti Gore and Tom Edmonds have written about these issues in more detail here.

It probably doesn’t need pointing out that customers who feel they are treated fairly by an operator are much more likely to continue gambling with them. It is worth spending some time to get advertising, terms and conditions and the website as clear as possible to avoid losing customers who feel they have been misled.