There has been a number of troubling news stories emerging in the first part of 2020 that confirms that the betting industry’s previously invincible position as a money-maker appears to be under threat.
The likes of MoPlay and SportPesa have faced severe financial difficulties, and the former has had their licence revoked until they can prove that they are financially solvent.
And then there’s Matchbook, the betting exchange which has also had its licence temporarily removed in the wake of a rather expensive legal battle with a high-rolling syndicate of overseas punters.
The conditions for bookmakers, particularly in the UK, are getting tougher what with the FOBT maximum stake cut, the ban on credit card gambling and the likely ramifications of the government’s review of the Gambling Act legislation.
The big names will likely adapt, evolve and survive, but some of the smaller bookies and betting sites may continue to struggle.
One of the most common questions that punters have is ‘what happens if my bookie goes bust?’. In this article, we’ll take a look at that issue and explain what *usually* happens in such situations, and use a couple of case studies by way of example.
The Basics of Customer Protection
As part of the terms and conditions which betting firms and bookmakers must abide by in order to be granted approval by the UK Gambling Commission, there are some basic rules that must be followed with regards to protecting their customers’ finances (that’s why brands that have circumnavigated this by being licensed by the Government of Curacao, or similar, should generally be avoided).
Under the UKGC’s rules, any gambling firm must set out in their terms and conditions whether your funds are protected, and how they do this, in the event that they become insolvent.
Here’s the most salient point: any money you have in your betting account is NOT protected by any governmental recourse scheme, as is the case with personal bank accounts and the like.
That means that gambling operators have more leeway when it comes to protecting your money, however most reputable firms will do their upmost to ensure their customers’ money is ringfenced and secured should the worst happen.
This will be specified in their T&Cs, so it is worth researching this information on a brand by brand basis to ensure you know what will happen in the worst case scenario.
Typically, betting firms will keep your money in a separate account to their own operating fund, and the idea then is that your funds are protected no matter what happens.
However, this isn’t always the case, it is NOT written into law and even if there is a separate account it does not guarantee that you can reclaim your money should the bookie go bust.
Your Levels of Protection
One of the other provisions of the Gambling Commission’s licensing agreement is that the operator must state in their terms and conditions whether they have no protection, medium or high protection in place.
Be careful though: this rating is actually specified by the company themselves, rather than being determined by the UKGC, although they are forced to explain their rationale for the category that they place themselves in.
To give you an idea of what the different categories mean, here’s what you an expect from your chosen bookie based upon their given rating.
Betting Account Funds Levels of Protection
|Level||What Customers Can Expect|
|None||No protection. Customer funds are gone should the operator go bust.|
|Medium||Measures in place to repay customers should operator goes bust, e.g. insurance|
|High||Funds are secured in a third-party account managed by an external auditor|
As you can see, you only want to be betting with firms that have at least medium-level protection in place, if not high – especially if you consider yourself a high roller with large amounts of money at stake.
Examples of betting firms with high-level protection are Paddy Power, Betfair, Coral, Ladbrokes and BetVictor.
Will My Outstanding Bets Still Be Settled?
The bad news is that any ante-post bets you have placed will not be settled if the company goes completely insolvent, so if you backed Liverpool to win the Premier League back in August then any winnings would be at risk.
But your actual stake money should be safe, along with any other bets you have which are yet to be settled, if the firm has medium or high-level protection. That’s because your stake money will be held in the separate account as specified.
Pending withdrawals are a little more complicated, because a business’s accounts can be frozen by an administrator.
What Should MoPlay Customers Do?
Note: Please be aware that as of the 24th February 2020 MoPlay have declared themselves insolvent and unable to accept withdrawal requests due to financial problems. The following was written before Addison Global and MoPlay reached insolvency. On the 16th March it was reported that MoPlay’s UK and Ireland customer base was purchased by Betfred.
As you may know, Addison Global – the parent company of MoPlay – had their licence suspended by both the UK Gambling Commission and Gibraltar Gaming Commissioner in February.
That was due to financial irregularities that meant that neither governing body was satisfied that Addison Global could continue to trade responsibly.
The main problem for their customers is that they only have the low-level protection, which means you may never see a penny from your account again – this is not to scaremonger, just stating facts.
Of course, the firm has only had their licence suspended – not removed entirely. They may find a way to restructure their finances and get back on an even keel.
For now, their customers can log in to their account and request a withdrawal in the normal way. This may take longer to reach you given the volume of withdrawal requests, but at least it gives you peace of mind.
If you have ante-post bets outstanding, the bad news is that these *may* be lost too.
What Should Matchbook Customers Do?
As customers of Matchbook will already know, their licence has been temporarily suspended by the UKGC.
There are three paragraphs that you need to read. The first two are from Matchbook themselves, and this is what they have posted in the wake of their suspension:
‘During this time, we will continue to settle all open positions and you will have access to your account to withdraw your funds. Should you have any questions regarding your account during this period, please contact customer services.’
‘Matchbook has been in regular contact with the United Kingdom Gambling Commission, and has agreed a path forward where it will deliver on a number of conditions. We will be back soon, and we are committed to providing a betting exchange which adheres to very high standards.’
But this third paragraph comes from their terms and conditions, and should be noted:
‘We hold customer funds separate from company funds in a mixture of bank accounts and in reserve funds which we hold with our payment processors. These funds are not protected in the event of insolvency. This meets the UK Gambling Commission’s requirements for the segregation of customer funds at the level: Not Protected.’
We cannot tell Matchbook customers whether to close their accounts or not, we can simply relay the basic facts you need to make your own informed decision.
What Should SportPesa Customers Do?
Another betting firm that has been in the news is SportPesa.
They have been blocked from operating in their native Kenya due to a dispute with the government there about taxes – the lost income has cost them sponsorship with Everton, the Football Association of Ireland and the Racing Point F1 team.
They are still licensed to operated in the UK with their Gambling Commission licence, but note that they have low-level protection – i.e. the money in your account is not protected should they go bust.