Player Fund Protection - Accreditation and rating

Hi now that the UKGC has firms list the player fund protection level in the Ts&Cs do you think this should be added to the accreditation list and included in the score?

As you know the options are:
Basic - segregated accounts
Medium - segregated accounts with some banking/quinticlose protection from other creditors
High - funds held in trust account

Now this is my little list and there are some surprises with Party, 32Red, William Hill and BetFred rating badly

Stars - High
Tlit - High
BetFair - High
Coral - High

Ladbrokes - Medium
Paddy Power - Medium
888 - Medium - (NB this is for UK players only as is the UK right to access an independent dispute resolution rather than just taking 888s ruling, international players not even guaranteed segregation).
Sky - Medium

32Red - Basic
BetFred - Basic
William Hill - Basic
Party - Basic - (again even this segregation is for UK players only!)

I'd suggest listing the protection level - non UK being undisclosed/bad - and scoring appropriately, I'd also suggest adding a penalty for having different terms for UK players vsrest of the world as sharp practice.

Anyway I hope this makes sense - what do you think?

Cheers

Given the bad history for players (Purple Lounge etc) which illustrates the importance of this element, I think Richas has a good idea here.

Like him, I'm surprised at the ratings of some of the companies he lists above.

I'm surprised that there have been no other CM member reactions to this sensible suggestion.

jetset said:

I'm surprised that there have been no other CM member reactions to this sensible suggestion.

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I can see where his point is coming from.

But its a hard thing to comment on as by looking at that list for an example William Hill is only offering Basic protection. But for me out of the examples tho its offering basic protection it is the brand I would still feel safest playing at.

Its also hard to find a way to work out how to make it affect their rankings when for example the two biggest sites on that list are not accredited in the first place.

For example I play at several of the high ranked accredited casinos but in all honesty I still believe and always will that the 2 main bookies sites William Hill and Ladbrokes will always be safer as the way things are going with all the new casinos etc any smaller site could find themselves in trouble one day. Where as the big 2 bookies are not going to suddenly go bust overnight so having the Basic level is not as bad as it really sounds.

paul7388 said:

I can see where his point is coming from.

But its a hard thing to comment on as by looking at that list for an example William Hill is only offering Basic protection. But for me out of the examples tho its offering basic protection it is the brand I would still feel safest playing at.

Its also hard to find a way to work out how to make it affect their rankings when for example the two biggest sites on that list are not accredited in the first place.

For example I play at several of the high ranked accredited casinos but in all honesty I still believe and always will that the 2 main bookies sites William Hill and Ladbrokes will always be safer as the way things are going with all the new casinos etc any smaller site could find themselves in trouble one day. Where as the big 2 bookies are not going to suddenly go bust overnight so having the Basic level is not as bad as it really sounds.

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I do see your point about it being just a part of assessing risk, that the largest firms with substantial retail assets are far less likely to go bust so the basic does not matter BUT it is about lifting standards across the whole industry.

I wanted the UKGC to demand funds in trust for all but they went for player choice and letting market forces drive improvement. My expectation was that all the big bookies would go for basic and am pleasantly surprised that Coral went for High. For me that matters, I have shifted my sports to them because of this industry leading position. The cost of the trust (compared to segregated) for the big firms should be pretty trivial, it is a bit of admin spread across many players.

I think it's a very good idea but raises one issue - which we can probably find a work-around for - in that the accredited list deals with a lot of casinos that do not have a UKGC licence and therefore, that information is not published. The hurdles therefore are:

1. Collecting and maintaining that info may not be a straightforward task.
2. A decision needs to be made on how the 4 levels affect a casino ranking compared to casinos who don't supply that information.

Comparative scoring by player or casino location gets too complicated so just applying it to UK players is not an option.

In fact, although I was responsible for implementing it, I've always had mixed feelings about the scoring system. On the one hand, it gives a quick reference point but on the other it is potentially misleading. The compromise to get way from making it a personal opinion was to automate it based on factual information so that it simply became a comparative system to enable players to measure one casino against another. But obviously every player has a different requirement from a casino so while reverse pending might be important to one player, licensing jurisdiction might be more important to another. No scoring system can pre-empt that. So as far as ratings systems go, might this simply just make the strong brands stronger when in fact better and more personal service etc often comes from the smaller brands?

Personally, I think it would be better to collect (where possible) and display the information but not let it affect the score.

Good practical points that I had not considered.

jetset said:

Good practical points that I had not considered.

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True, the practicalities (weightings) of the scoring would need sorting but the non UK issue is an opportunity not a threat. The non UK sites should be encouraged to disclose how they hold player funds, using the UK structure makes it easier to understand so they should be encouraged to use the new standard.

A non UK site wanting to improve its score just needs their Ts & Cs to disclose the relevant info in what is legally binding terms and conditions.

If they don't disclose even basic segregation then that should lower the score as it becomes likely that player funds are being used as working capital.

Richas said:

True, the practicalities (weightings) of the scoring would need sorting but the non UK issue is an opportunity not a threat. The non UK sites should be encouraged to disclose how they hold player funds, using the UK structure makes it easier to understand so they should be encouraged to use the new standard.

A non UK site wanting to improve its score just needs their Ts & Cs to disclose the relevant info in what is legally binding terms and conditions.

If they don't disclose even basic segregation then that should lower the score as it becomes likely that player funds are being used as working capital.

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I'll discuss it with Bryan at some point and see what he thinks the best course of action is.

Like I said, the only way you'll ever fully protect player balances is operators having a bond in order to be allowed to take players from the bonded countries. It'll never happen. I can't ever see the government stepping in and covering players now they're taxing turnover in the UK either.

Simmo! said:

I'll discuss it with Bryan at some point and see what he thinks the best course of action is.

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Did Bryan have a view on this proposal?

Richas said:

True, the practicalities (weightings) of the scoring would need sorting but the non UK issue is an opportunity not a threat. The non UK sites should be encouraged to disclose how they hold player funds, using the UK structure makes it easier to understand so they should be encouraged to use the new standard.

A non UK site wanting to improve its score just needs their Ts & Cs to disclose the relevant info in what is legally binding terms and conditions.

If they don't disclose even basic segregation then that should lower the score as it becomes likely that player funds are being used as working capital.

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If player deposits aren't used as working capital, then where does it come from?

I need this explaining, as every viable business needs cash flow. Last weeks' sales pay for this weeks' stock and so-on.

There has to be some kind of reserve asset here, i.e. the casino is required to keep an average weekly or fortnightly cash-out total separately - but at some stage deposits need recycling.

dunover said:

If player deposits aren't used as working capital, then where does it come from?

I need this explaining, as every viable business needs cash flow. Last weeks' sales pay for this weeks' stock and so-on.

There has to be some kind of reserve asset here, i.e. the casino is required to keep an average weekly or fortnightly cash-out total separately - but at some stage deposits need recycling.

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One thing to take into consideration is also that the more withdrawal options, and currencies, a casino has, the more cash it needs to make sure there are sufficient funds that lasts for example during weekends. This is I believe the mayor reason for casinos not to provide weekend withdrawals.
Example: A casino has Neteller, Skrill, Ecopayz, Instadebit, Trustly, in USD, GBP, EUR, SEK, CAD, AUD and NOK. This means 35 different accounts where you need to make sure there is sufficient funds.

Visa/MC is another issue. In that case the casino have to wait, maybe a week or two depending on agreement, to get the cash into the casinos account but the cash deposited is immediately playable, and winnings withdrawable, for the punter. This lead time has to be financed by the casino as well.

On top of this the player funds are to be separated from the casinos working capital ie: the casino can’t use them for funding all the payment options.

This means that the funding of a casino has to come from owners equity and possibly bank loans.

I haven't had much of a chance to look at this yet, but like Simmo - I do have some reservations since there are a number of privately owned casinos that do not disclose this sort of information. one the other hand, it would be good to somehow rate the safety of the funds which are deposited/held by the casinos - but it might not be feasible. As Simmo suggested, w could try to list this somehow for casinos willing to divulge this information.

I'll try to look into this this week.

Matti said:

One thing to take into consideration is also that the more withdrawal options, and currencies, a casino has, the more cash it needs to make sure there are sufficient funds that lasts for example during weekends. This is I believe the mayor reason for casinos not to provide weekend withdrawals.
Example: A casino has Neteller, Skrill, Ecopayz, Instadebit, Trustly, in USD, GBP, EUR, SEK, CAD, AUD and NOK. This means 35 different accounts where you need to make sure there is sufficient funds.

Visa/MC is another issue. In that case the casino have to wait, maybe a week or two depending on agreement, to get the cash into the casinos account but the cash deposited is immediately playable, and winnings withdrawable, for the punter. This lead time has to be financed by the casino as well.

On top of this the player funds are to be separated from the casinos working capital ie: the casino can’t use them for funding all the payment options.

This means that the funding of a casino has to come from owners equity and possibly bank loans.

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Actually no, because the casino only needs one account at each of those webwallets - they can receive payments and refund them in all the currencies available in the webwallet. And then they only need to aggregate the totals for all of them.
Yes, there is a delay for cleared credit card funds, but if you think about it that would only affect the first few days the casino is open - from then on the flow of payment is established.

Remember player funds are only current account balances/in play plus pending withdrawals. This amount varies constantly therefore surely is impossible to cover at any one time to the nearest penny.

dunover said:

Actually no, because the casino only needs one account at each of those webwallets - they can receive payments and refund them in all the currencies available in the webwallet. And then they only need to aggregate the totals for all of them.
Yes, there is a delay for cleared credit card funds, but if you think about it that would only affect the first few days the casino is open - from then on the flow of payment is established.

Remember player funds are only current account balances/in play plus pending withdrawals. This amount varies constantly therefore surely is impossible to cover at any one time to the nearest penny.

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They can, but it's insanely expensive due to the fx-conversion on each transfer, so it's not a feasible alternative.

onkel said:

They can, but it's insanely expensive due to the fx-conversion on each transfer, so it's not a feasible alternative.

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Would they not have special arrangement or deal with the webwallets? After all gaming is their main transaction source. Anyway we need a precise definition of what is construed as 'player funds' and where they are held and how they are managed.

dunover said:

Would they not have special arrangement or deal with the webwallets? After al gaming is their main transaction source.

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Cannot speak for all gaming sites, but the ones I've worked / consulted for have had one account for each currency. The web wallets in particular charge hefty fx-fees.

onkel said:

Cannot speak for all gaming sites, but the ones I've worked / consulted for have had one account for each currency. The web wallets in particular charge hefty fx-fees.

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Neteller offers multiple currency accounts for VIP players. I always assumed casinos have that option too, especially as they transfer a lot more than any single player.

Jory said:

Neteller offers multiple currency accounts for VIP players. I always assumed casinos have that option too, especially as they transfer a lot more than any single player.

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Well, yes, but isn't that the same as several accounts? If a VIP player or casino move money from e.g. EUR -> USD they will be charged a fx-fee. To avoid this to happen frequently, they need to make sure each currency account has enough funds in it to cover day-to-day deposits and withdrawals.

dunover said:

Actually no, because the casino only needs one account at each of those webwallets - they can receive payments and refund them in all the currencies available in the webwallet. And then they only need to aggregate the totals for all of them.
Yes, there is a delay for cleared credit card funds, but if you think about it that would only affect the first few days the casino is open - from then on the flow of payment is established.

Remember player funds are only current account balances/in play plus pending withdrawals. This amount varies constantly therefore surely is impossible to cover at any one time to the nearest penny.

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Onkel explained the issue with fx. The cost is just to high.

Regarding Visa/MC: I don't understand why this should just affect the first few days when the casino opens. This is actually a ongoing problem when you grow. One more aspect of this is the agreements I've seen with Payment Solution Providers. They can have clauses to protect them from being stuck with potentional future charge backs. They can keep up to 10% for 6 months depending on their risk assesstment.

Jory said:

Neteller offers multiple currency accounts for VIP players. I always assumed casinos have that option too, especially as they transfer a lot more than any single player.

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You can get thoose accounts from webwallets, and banks. You still however have to pay when you change money. Maybe it doesn't say "fee" when you move money between the accounts but the differences in fx rate is high. Try to move from 100 euro from the euro account to the GBP account and then back. I suspect you will get pissed to say the least when you see what they have charged.

Matti said:

You can get thoose accounts from webwallets, and banks. You still however have to pay when you change money. Maybe it doesn't say "fee" when you move money between the accounts but the differences in fx rate is high. Try to move from 100 euro from the euro account to the GBP account and then back. I suspect you will get pissed to say the least when you see what they have charged.

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I always assumed it would be free to transfer money between currency's within your neteller account, otherwise what is the VIP benefit of having multiple currencies available if you are still charged for the conversion?

Multiple currency accounts
VIPs have the exclusive ability to benefit from multiple currency accounts. Having access to an extra currency helps to save money on FX fees.

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Jory said:

I always assumed it would be free to transfer money between currency's in your neteller account, otherwise what is the VIP benefit of having multiple currencies available if you are still charged for the conversion?

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I actually don't know how this works on Neteller. Stating that they dont charge any "FX fee" isn't necessarily the same as it is free of charge. Just look at the exchange business at an airport. All say no fees wich ofcourse in fact isn't really true. The fee is just included in the fx rates.

The VIP benefit is that you can have multipel accounts is great if you use different currencies on the internet. Then there is no need to change currencies and charged for the fx. I for exampel play in Euros on some casinos and in SEK on others.

Matti said:

I actually don't know how this works on Neteller. Stating that they dont charge any "FX fee" isn't necessarily the same as it is free of charge. Just look at the exchange business at an airport. All say no fees wich ofcourse in fact isn't really true. The fee is just included in the fx rates.

The VIP benefit is that you can have multipel accounts is great if you use different currencies on the internet. Then there is no need to change currencies and charged for the fx. I for exampel play in Euros on some casinos and in SEK on others.

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Yeah, true. Thanks for your answer.

I got an email saying I was close to Silver VIP and the main benefit would be allowing me to have both a GBP and EURO account. I assumed I could transfer from my GBP account to my EURO account for free, and then deposit to a casino so I save on the fx fee. There are more and more casinos only offering Euro accounts so saving on the fees would help.

Like you say, they might still charge for this, perhaps just a lower rate. I will check with them as if they still charge, then it's not much of a benefit at all as everything has to be converted back to GBP before I withdraw, otherwise the bank charges the fee.