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How safe is your money if a bookmaker goes bust?

Online betting firms offer differing levels of protection on customer funds
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The average punter has never been better informed, better served or had a wider choice in their betting than they do now.

As such, they are savvier creatures on the whole, often making good use of odds comparison websites to secure better prices and taking advantage of concessions such as best odds guaranteed, money back specials and good will refunds as part of their staking.

This is the result of a competitive marketplace created by the rise in online betting and the linked battle for customer acquisition and retention in an arena where there has rarely been more opportunities to shop around for a bet.

But for all this choice, all this information and all this understanding, one thing punters may not consider so thoroughly when depositing their funds into an online betting account is how safe their money is in the event of that layer suffering financial difficulties.

With £5.3 billion gambled online in the United Kingdom between March 2018 and April 2019 – 37 per cent of the total spend – according to the Gambling Commission (GC), such considerations should increasingly form a crucial part of punters’ thinking.

Indeed, those thoughts may have previously been that funds are fully protected, allowing them to be retrieved in their entirety should a bookmaker go bust. However, that is far from the case with many firms, including some well-known names, offering no strict protection on customer funds.

The GC stipulates betting companies categorise their safeguarding of users’ funds into one of three levels: not protected, medium protection or high protection. 

Punters have to be made aware of what level of protection a bookmaker provides when making their first deposit into an account, with this information being presented in a way that means bettors cannot continue until acknowledging it. If this is not the case, the GC can take action against the operator.

For all bookmakers, customer funds are held in separate accounts to the firm’s main business, but what happens to that money in the event of an insolvency is starkly different.

At a high protection firm, money is held in an account totally distanced from the bookmaker and is controlled by an independent party, while medium protection makes use of measures such as insurance to provide payouts of user funds.

However, unlike protected customers, punters who use ‘not protected’ sites would have their money considered as part of a layer’s overall business in the event of it ending operations.

This was the prospect facing users of MoPlay, which ceased trading last month and stopped customer withdrawals, referring them to clause nine of its terms and conditions, which read:  “Funds will be held separate from company funds in a mixture of bank accounts and reserve funds which we hold with our payment processors. However, if there was ever a situation where we became insolvent, your funds would not be considered separate to the other company assets and you may not receive all your funds back.”

The range of bookmakers operating presents challenges to people looking to place funds, with each having differing terms and conditions. To glance at Oddschecker is to get a glimpse as to the range of firms offering a platform to bet on – for example 22 layers are included in the ante-post market for the Qipco 2,000 Guineas, including such unusual names as Bethard and Gentingbet alongside more traditional figures like bet365, Coral and William Hill. 

Research conducted into 63 prominent bookmakers by the Horseracing Bettors Forum (HBF) showed only 21 of the firms (33 per cent) offered protection whereby customers were certain to get their money back in the event of an insolvency. A further 19 layers (30 per cent) provided protection but “cannot absolutely guarantee that all funds will be repaid”.

How well protected are your funds? See the HBF tables here

Colin Hord, HBF chair, said: “With each day the coronavirus crisis continues, the likelihood of bookmakers going bust increases and for some bettors this could mean that their hard-earned money is lost for good.

"We are seeing a bit of a shift of our attention at the moment" - HBF chair Colin Hord

“While we do all we can to urge bettors to reduce or move their funds to an account that offers high protection, we believe that in this day and age bookmakers should no longer be stating on their terms and conditions that there is no guarantee funds will be returned.”

Among the bookmakers to offer high protection is Betfair, which has been through a rigorous process to provide additional assurances for players using its sportsbook and exchange. Other companies to have these measures in place are BetVictor, BetStars, Betway, Coral, Paddy Power and Smarkets.

Barry Orr, Betfair’s head of horseracing PR, said: “Betfair customer funds are fully ring-fenced and legally protected. Under the Gambling Commission assessment model, they are considered to have high protection, which is the top classification. 

“In the extremely unlikely event of the company going bankrupt, these funds cannot be used to discharge company liabilities and would be returned to customers without delay.

“Our preference is to ensure customer funds are safeguarded to maximum level so we’ve opted for the most stringent requirement.”

The HBF states that it is continuing to lobby bookmakers to raise the protection levels they provide for their users and has been in talks with the GC over the matter, believing its “guidance to consumers needs to be clearer on this issue.”

Where firms sit in the protection system is down to them, with an ability to move up - and down - the bands depending on what measures they wish to put in place. The level each bookmaker places itself in is not assessed by the GC but its accuracy may be checked by the regulator periodically.

Among the 23 companies identified by the HBF as offering no protection to punters are the likes of Betfred, Matchbook, MarathonBet and Sportpesa. The Tote also falls into this category, although it is understood to be looking into implementing means to move up to an increased level of protection.

Susannah Gill, director of communications and corporate affairs at the Tote, said: “We share with customers our arrangement for handling their funds using a specific rating scheme defined by the Gambling Commission. 

“In practice there are a number of additional controls, checks and measures which ensure customer funds are segregated and held in a separate bank account. This is how the Tote has historically operated and is in line with many other licensed operators across the sector.” 

Customer funds protection featured in the review of online gambling in March 2018 by the GC, which found "existing requirements, which aim to help consumers differentiate between different level of customer funds protection, have had limited apparent impact on consumer behaviour".

This prompted the wording of the ratings system to be changed to make the contrasts between the levels more apparent, while a consultation was recommended into making protection of funds mandatory for all firms.

Such a move would likely have cost implications for consumers, meaning for now the ball remains in the punter’s court as to where they choose to deposit funds.

A GC spokesperson said: “We insist that operators who hold customer funds tell customers whether funds are protected in the event of insolvency and the level of protection is offered.

“In 2013 we consulted on what, if any, requirements should be placed on operators to protect customer funds in the event of insolvency or against fraud. Following that consultation we decided not to require operators to guarantee customer funds because of the potentially high costs which may be passed on to the consumer.

“Instead, we ensure that customers can decide for themselves whether to risk their money with an operator that offers low or no protection, or whether they wish to incur the potentially higher costs of gambling with an operator that offers higher levels of protection.”

So when choosing the next firm with which you place your bet, check the odds, see what concessions you may be able to get and spare a minute to read how protected your money will be to ensure you have complete punting peace of mind.

Read more from our Betting Masterclasses series:

Long-range punting: how to make the most of the odds on offer months in advance

A numbers game: how to use Racing Post Ratings to improve your betting

How to get an edge when you're at the races

How keeping track of trainers can give you a betting edge

Why the all-weather is the perfect betting medium for the discerning punter

Four experts on the art of being selective when it comes to betting

Making it pay all over the world: the intricacies of the international scene

It's all in the breeding: the most underrated weapon in a punter's armoury

A winning system: using data to your advantage in the battle with the bookies

Still great value on the exchanges - you just might have to work a bit harder

James Willoughby: why speed is of the essence when rating horses

Betting for a living: a pro punter's insight on how to make gambling pay

Why there's never been a better time to be a serious student of the form book

Place bets on international races with the Racing Post app. Log in to your bookmaker accounts in the Accounts tab in the bottom right and then click cards to view the racecards


With each day the coronavirus crisis continues, the likelihood of bookmakers going bust increases
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