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Automatically-generated e-mail “sent in error” draws further adverse publicity in Bet365 case

Bookmaker Bet365 saw further negative coverage in the national press last week after it was forced to admit “acting in error”, over a year into a dispute with a customer involving £54,000 of unpaid winnings.

The bettor, whose identity is known to The Guardian newspaper but which it has not revealed, according to its coverage opened an account with Bet365 on 16 April and deposited £30,000 the following day, when she promptly lost £23,000 on a series of bets on horse racing. On the same day, she received an email from the bookmaker informing her that her maximum bet limit had been increased. The following day she placed further bets with her remaining £7,000 and saw an upturn in her fortunes, winning a total of £47,000, which took her balance to £54,000. At that point, Bet365 contacted her again by email to say that, as a result of a “trading decision”, her account would be restricted to a maximum stake of £1 on racing bets, although she was welcome to gamble as much as she wished on gaming products.

Disappointed by what she perceived as a refusal by the bookmaker to accept her bets, the punter requested that her balance be transferred to her debit card. Although it confirmed on 27 April that her identity had been “fully verified”, Bet365 has so far refused to do, despite a series of requests over the following months. The customer therefore lodged a complaint with the independent dispute adjudicator IBAS, which has been considering the case since November.

The Guardian, which, it is fair to say, generally has a fairly anti-gambling stance, published a piece in June which was highly critical of Bet365, pointing to increasing frustration in recent years on the part of bettors surrounding restrictions being placed on their bets by bookmakers. It quoted figures from the Horserace Bettors Forum showing that as many as 20,000 online accounts had been closed in the first six months of 2016 because, said the paper, “they were not sufficiently profitable for the operator”. It also quoted Paul Fairhead, a campaigner on gambling issues whose Twitter account, @BoycottBetFred, it described as “a rallying point for punters with grievances against bookmakers”. Mr Fairhead levied a number of criticisms against operators in relation to delays in withdrawing balances, saying that “they are holding on to the money in the hope that the problem goes away”. He called for the Gambling Commission to step in to implement and enforce “standardised and streamlined” verification systems across the industry.

The Guardian had another opportunity to have a go at Bet365 last week, when it emerged that the company’s systems had sent an automatically-generated email to the customer with whom it is in dispute, warning her that it could (or would, depending on which paragraph of the Guardian report one chooses to believe) charge a 5% “ongoing administration fee” on her account every 28 days, until the balance reaches zero. This is because the account has been marked as “dormant” following a period of precisely 12 months of inactivity, despite the dispute still being subject to the IBAS investigation, with the result that the account remains frozen.

Bet365 immediately confirmed to the customer that its initial email regarding the administration fee had been “submitted in error” and stated that it would not charge any form of fee “while we are still awaiting for you to sign and return the letter which we have submitted to you”. The coverage does not make it clear what the letter relates to, but it is believed that it is a request for the customer to sign up to new terms and conditions governing her account, something she is refusing to do while her funds remain frozen.

This error on Bet365’s part is unfortunate because, although the operator has promptly admitted its mistake, this has given the Guardian an opportunity to attack administration fees charged on dormant accounts across the industry. The paper points out that such fees are commonplace, and that their amounts, and the period of inactivity after which they apply, vary widely from one bookmaker to another.

Had Bet365 applied its “ongoing administration fee” in this case, the amount deducted from the customer’s balance in the first month would have been approximately £2,700. The Guardian consulted its go-to gambling industry critic again, and Paul Fairhead was quick to go on the record as saying that such a fee would have been “almost impossible to justify”, and called for maximum fees to be set – presumably by the regulator.

Leaving the issue of the gaffe on the administration fee to one side, the issues arising from this case are of significance to the industry – and many will be awaiting the IBAS adjudication, which is expected within a month, with interest. The time it is taking to determine the case is unusually long and, given the lack of any substantive detail about the dispute in the Guardian’s reporting and any disclosure of the correspondence between the parties, it is difficult to know what the real issues are. Bet365 has also refused to comment on the case, via The Guardian or otherwise.

Bet365 has confirmed to the customer that her identity had been “fully verified”, and the fact that the company was willing to allow her to gamble far higher amounts than the £1 limit, applied to her racing bets, on other products would appear to suggest that the operator was satisfied as to the source of funds. In addition, the customer’s bank has (according to The Guardian) assured her that there are “no concerns about money laundering through her account” (although we only have this third-hand). Further, reports state that there is “no dispute about the validity of her winning bets”. There is of course the possibility that the customer concerned, albeit unwittingly, laid bets on races the outcomes of which were judged by the operator to be suspicious, or “fixed”.

The truth will not emerge, if indeed it does, until the outcome of the IBAS investigation. In the meantime, my view is that it is all too easy – and unjustified – for media outlets such as The Guardian to criticise gambling operators for delays in paying out withdrawals from customer accounts. Had this case simply been about the bettor being “unprofitable”, that would explain the limit on bets, but not the refusal to allow the withdrawal to take place. That, and the length of the IBAS investigation, suggest to me that there is more to this case than meets the eye.

The Guardian accuses gambling operators of “stringing out pay-outs for weeks, or even months”. In so doing, perhaps it neglects the fact that the industry is one of the most heavily-regulated sectors in the UK. The industry has to comply with all the stringent requirements applying to money-laundering and suspicious transactions, match-fixing, and collusion and cheating. In addition, operators (and this is of relevance to the criticisms raised relating to administration fees) are subject to a requirement to ensure that their terms and conditions are fair, and that they otherwise meet the licensing objective of ensuring that gambling is provided in a fair and open way.

We await the outcome of the IBAS adjudication – and any response or reaction from the Gambling Commission – with interest and will update you in a future edition of our newsletter in due course.