Online casinos have come under a lot of scrutiny from regulators over the last year. In 2016 the UK Gambling Commission and Competition and Markets Authority began investigating online casinos. The Advertising Standards Authority stated that according to the Gambling (Licensing and advertising) Act 2014, “Marketers and media owners should assure themselves that online casinos are not promoting inducements that could invite excessive or harmful play”. Given how clear this statement is, one would have thought that no investigation was necessary. Unfortunately, these regulations were largely ignored. However, by penalising mainstream online casino BGO and threatening further action against them the Competition and Markets Authority has shown that they are willing to take action. One of the main features of online casino gambling that has drawn this unwanted attention to the industry is ‘wagering requirements’.
What are wagering requirements?
Online casino bonuses always sound amazing – but it’s not as simple as clicking the bonus and cashing out. To stop this system from being abused, ‘wagering requirements’ apply. This means that before winnings resulting from bonus cash can be withdrawn, players have to wager a certain amount of money, usually a multiple of the bonus. Players might win some money as they play, but they have to risk a certain amount in order to turn the bonus winnings into cashable credit.
That all seems justifiable and even equitable because punters were finding ways to play the system, placing big bets on even-money games, like black and red in Roulette, where the only losing number was zero. The industry responded by closing loopholes and limiting the kinds of games that would count towards a wagering requirement. Anything with a lower house edge was, and in some cases, still is, excluded from wagering requirements or contributes towards the wagering requirement balance at a lower rate. Games that favour the house more generously will count towards a wagering requirement 100%. In some instances, not only were winnings blocked for removal, but also the money that was deposited to gain the bonus. Like everything, the terms and conditions need to be studied and understood – after all, players can simply refuse bonuses, but usually, they don’t, not least because terms and conditions were buried in small print and cloaked in legalese.
Bonuses got larger and larger, and wagering requirements increased. A lot. The fairer online casinos have wagering requirements of anything between 5X and 20X the bonus amount, but in others, it can be as many as 80x the bonus, making it extremely difficult for the player to actually win and withdraw any money at all.
Bonuses attract new players, boosting the membership numbers, and possibly encouraging larger initial deposits. The second major benefit of wagering requirements is that they are an incentive for players to stay in the game. The more a person plays, the more likely they are to keep playing. Chasing wagering requirements to cash ‘free money’ is a great way to keep players in their seat, and the larger the bonus players claim with their initial deposit, the longer that will take.
Unfortunately, the system worked too well in favour of the online casinos. Although profits boomed, complaints increased and wagering requirements as well as other unfair terms attracted the attention of industry regulators. While these requirements are framed by casinos as ‘protecting’ them from people who might exploit bonuses and other offers, regulators take a harder line. BGO was accused of ‘misleading advertising’ and fined £300,000 by the UK Gambling Commission. As a result, they recently announced that they would be getting rid of wagering requirements entirely. BGO’s Chief Marketing Officer, Allan Turner, explained that BGO’s decision to lift wagering requirements was directly related to that action, stating:
“If we have evidence players find wagering conditions confusing or unfair, then that’s enough for us to take a decision. We have always run a safe, trusted and fair online casino and player enjoyment is and always will be our number one priority”.
Other companies are also under investigation for being on the wrong side of consumer law, and are likely to face similar fines. BGO are the first mainstream brand to offer “fair spins” and bonuses with no wagering requirements. Other online casinos have adapted to the enforcement of regulations by displaying terms and conditions right next to any bonus offers and some simply continue to ignore the requirements. However, a shift towards dramatically reducing wagering requirements or abandon them altogether is expected to be the main trend.
However, there is a second liability. In some ways, the most important word in Allan Turner’s statement isn’t ‘fair’, but ‘safe’. Everyone expects casinos to make money, but when it comes to creating problem gamblers, the picture becomes more complicated. Encouraging people to spend more time fulfilling their wagering requirements could be seen as doing just that by creating the conditions to “invite excessive or harmful play”. Lawsuits pursuing casinos for losses by addicts have never yet won a case at trial, but if the casinos knowingly encourage online gamblers to spend hours chasing bonuses, then they are vulnerable in the event of a class action suit that might bring embarrassing private strategy documents into the public domain.
Public exposure presents a far greater threat than fines by regulators, and if there’s one thing casino operators avoid, it’s risk. Many operators are expected to abandon or seriously reduce wagering requirements. Gambling Commission Chief Executive, Sarah Harrison, noted that “customers must have faith that if they win, they will not end up feeling that the deck is stacked against them because of an obscure condition that they did not properly understand”. That said, a total cessation of bonuses would be no fun at all.
The Start of the End for Wagering Requirements
The news of BGO removing wagering requirements spread like wildfire through the industry and has almost certainly had other operators considering similar moves. Several brands already exist with “wager-free” policies on their bonuses, but none so far with the prominence of BGO.
The recent pressure from regulators has also given rise to new casino comparison website NoWagering.com which specialises in casinos with low wagering requirements. They predict that “we’ll soon be witnessing a growing trend where casinos compete on favourable terms rather than the size of their bonus”.
Whether we are witnessing a shift to “no wagering” bonuses or not remains to be seen, but there are certainly a growing number of casinos with wager-free promotions being at the heart of their marketing campaigns, as well as players seeking them out. By taking their business to online casinos with better bonuses all round, they are also shaping the industry they enjoy.