What Happens to My Money if a Gambling Website Goes Bust or Closes?
While online gambling on a gambling website - it can pay out some handsome returns when you get lucky, it’s only natural that people are curious about what happens to their money in the event that their chosen online gambling website goes bust or closes down. In this guide, we’ve got everything you need to know about what happens when a gambling website shuts down, how your money is protected in these circumstances, and what you can do to protect your funds when gambling online.
What happens when a gambling website shuts down
Insolvency is the most likely reason for a gambling website to shut down. The gambling industry is incredibly lucrative, meaning it’s also particularly competitive, which can take its toll - especially for brand new names. While it’s pretty rare that a gambling website would go bust completely, it’s not impossible.
A failing gambling business might merge with a competitor to avoid insolvency. In this case, customers needn’t worry about their funds - they can either gamble at the new website with their transferred funds, or withdraw their funds and move on. Even if a failing business doesn’t merge with a larger brand, best practice would be to give customers plenty of warning to withdraw funds and stop gambling well in advance of a business closure.
However, there are no rules that stipulate what a gambling business must do in case of closure. This means that, in theory, you could log in one day to find you can’t access your funds. For this reason, it’s important to understand what level of protection you do have over your gambling funds.
Current UKGC Requirements
The UKGC states that deposited funds "are not protected by the government in the same way that personal bank accounts are". Current UKGC licensing requirements mean that online gambling companies must keep player funds in a separate account, but this does not mean the funds are protected if the business were to become insolvent. It’s up to each individual gambling company to state whether they offer any further protection to players’ funds in the terms and conditions of the website.
There are three different levels of additional player fund protection and it’s up to gambling businesses to decide which category their protection falls under.
|High protection||Customers’ money is held in an account which is legally and in practice separate from the rest of the company. This account is controlled by an independent person or external auditor.|
|Medium protection||There are arrangements (eg insurance) to make sure that the money in separate accounts is given to customers if the company goes bust.|
|Not protected||Customers’ money is held in an account which is legally and in practice separate from the rest of the company. This account is controlled by an independent person or external auditor.|
While gambling websites needn’t seek approval from the Gambling Commission before they classify their level of protection, they may be subject to random checks for the accuracy of this extra level of protection.
How to protect your money when gambling online
It goes without saying that you can’t foresee the insolvency of a gambling website. However, there are a few steps you can take to protect your funds when you gamble online.
Play at UK licensed casinos
Every country has its own regulation when it comes to gambling. While some only permit gambling operators that hold licenses specific to that country, others permit online casinos and betting websites that are licensed in other jurisdictions. The UK Gambling Commission (UKGC) is the world’s most vigilant gambling governing body, holding all licensees to incredibly high standards when it comes to player protection and fair play protocols. Currently, there isn’t any regulation in play that stipulates how UK licensed gambling operators must protect player money, other than storing it in a separate account. However, these websites must clearly state what protection, if any, they do offer. This means you can make an educated decision about where to play and bet online.
Read terms and conditions closely
Reading and, most importantly, understanding, the terms and conditions is vital. This small print details the level of protection you have so that you can enter into an agreement understanding exactly what it is you’re signing up for.
Consider how much you deposit
Even if you’re a high roller looking to play high stakes casino games or bet big on sports, you might want to consider how much you leave sitting in your online gambling account for an extended period of time. It may be more convenient to make one larger deposit but, if the business were to go bust, you could risk losing this lump sum.
Slow, or non-existent payouts could be one of the first signs that a gambling website is struggling. In this case, your best bet is to withdraw your funds as soon as possible. Casino forums are also a good source of information on this - even if you haven’t experienced any problems, other customers may have. For example, this thread on Gambling Portal Webmaster Association discussed Codeta’s potential closure before it became public knowledge.
While the UKGC does have strict guidelines to protect consumers when it comes to fair play protocols and responsible gambling initiatives, there is relatively little protection when it comes to the protection of player funds. For this reason, it’s especially important that you pay close attention to the terms and conditions of your chosen gambling website before you sign up to play real money games.
This is a guest post for Profit Accumulator written by Savannah.
Please be aware that the information provided by this blog is subject to change. We recommend that you do not take any information held within as a definitive guide to the relevant matter being discussed. You are advised to seek professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.
Due to the nature of the matters discussed on this blog, the information contained within it and any pages linked to from it are clearly subject to change, without warning.
Any opinions expressed within the blog are those of the author and not necessarily held by Profit Accumulator Ltd itself. The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Profit Accumulator Ltd. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
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