Is this Normal? Bankruptcy?

I was just reading through some terms at a casino, and came across:

If a player is known to have gone bankrupt in the country of his residence, the Company reserves the right to terminate the user account and suspend all payouts to the player.

This does not affect me as I am not bankrupt.. But is this normal or even allowed..? What difference would this make to a casino...

Casino2014man said:

I was just reading through some terms at a casino, and came across:

If a player is known to have gone bankrupt in the country of his residence, the Company reserves the right to terminate the user account and suspend all payouts to the player.

This does not affect me as I am not bankrupt.. But is this normal or even allowed..? What difference would this make to a casino...

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I only know what the German law states. When you declare bankruptcy any type of estate, bank balances, saving accounts, income will be taken into account at how much your creditors will get. Winnings from lotteries, casinos, scratch tickets etc. count towards that as well.

Hence, i think a casino will have to hold on to any winnings as the bankruptcy administrator might sue them if he finds out they paid out to you.

I had no idea! Seemed such a weird term, but I guess it makes sense then!

I suppose this applies to when the person goes bankrupt so that they can't hide money away at casinos, then withdraw it later when they are discharged.

I imagine if they did make several large deposits via say credit card, then go bankrupt, they are not entitled to that money and the casino has every right to withhold it and pass it to the official receiver to go into the bankrupts estate. I also think the official receiver may be interested in any large wins in the 5 years following being discharged as they may wish to reopen that case and pay off creditors.

In theory, any large balances would show in bank accounts (via credit reports) and are traceable, whereas hiding it at casinos may prove slightly untraceable.

Good spot though and I agree with those T&C's.

The problem is whether the casino is doing this just to have an excuse to pocket the money, or because they fully intend to protect the creditors of someone who has gone bankrupt by preventing their casino from being used to hide money.

The usual reason for a company being worried about a bankrupt is that they are likely to be a bad credit risk, and legally bankrupts are not allowed to have any form of credit until they have been discharged from bankruptcy. Since casinos don't give credit, this shouldn't be a worry for them.

It's possible that they would suspend an account for fear that the official receiver of the player's country decides that the deposits should have been handed over as part of the insolvency, and recovers them from the casino regardless of whether they were played and lost or generated a win. It would create a no-win situation for the casino, but a possible win for the player if they were able to increase their balance through play.

One question though is how do casinos "become aware" that someone has been made bankrupt, it's not something a player is likely to volunteer, and it's the kind of information that is not all that easy to find out without running a full credit check on a player, which is what would normally stop a bankrupt from tricking their way into getting further credit.

vinylweatherman said:

One question though is how do casinos "become aware" that someone has been made bankrupt, it's not something a player is likely to volunteer, and it's the kind of information that is not all that easy to find out without running a full credit check on a player, which is what would normally stop a bankrupt from tricking their way into getting further credit.

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When I joined up with a local casino, I wasn't a full member with a card etc until they had done a full credit check. But with online casinos, I've never seen any questions relating to bankruptcy and how hard would it be to ask that simple question? A simple tick box for 'Have you been declared bankrupt in the last 6 years or are you aware of any pending bankruptcy against you?'

I know that bankruptcy papers do ask if any debts are gambling related, so whether the official receiver looks further into this, I don't know.

RichyJ75 said:

When I joined up with a local casino, I wasn't a full member with a card etc until they had done a full credit check. But with online casinos, I've never seen any questions relating to bankruptcy and how hard would it be to ask that simple question? A simple tick box for 'Have you been declared bankrupt in the last 6 years or are you aware of any pending bankruptcy against you?'

I know that bankruptcy papers do ask if any debts are gambling related, so whether the official receiver looks further into this, I don't know.

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Credit checks leave a marker on your file and can make it hard for someone to get a loan, so companies need to have good reason to perform full credit checks on customers else they could fall foul of the Data processing laws which prohibit "fishing expeditions" by companies into people's personal data. Online casinos probably can't run these checks at all because the reference agency probably can't identify them as being authorised to do so. Many online casinos therefore have players sending in reams of documentation instead.

If someone is intentionally trying to hide money pending bankruptcy, they have nothing to lose, and everything to gain. They are going to lie if the only check is a tick box "are you bankrupt" question and hope to get away with it. Unless the casino has the means to check, they will get away with it unless they let slip something about it when contacting support.

vinylweatherman said:

Credit checks leave a marker on your file and can make it hard for someone to get a loan, so companies need to have good reason to perform full credit checks on customers else they could fall foul of the Data processing laws which prohibit "fishing expeditions" by companies into people's personal data. Online casinos probably can't run these checks at all because the reference agency probably can't identify them as being authorised to do so. Many online casinos therefore have players sending in reams of documentation instead.

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I regularly review my credit file (free of charge through www.noddle.co.uk) and can see searches from various casinos logged as 'Anti-Money Laundering' searches. To name a few, Mr Green, WHG, Co-Gaming ltd, Profitable Play, Gala and Paddy Power all enquire on credit files and have left their mark. Bit strange that some of them enquire on a regular basis, but no problems anywhere.

Also, bankruptcies are all in the public domain and readily available on the Insolvency Register (free of charge), so casinos can easily check this if they so desire without the need to look on credit files.

Again i can only state German law, but i suppose this is harmonized with EU law.

Any institution or legal entity having financial dealings with you "can" request a credit file search. This can be your landlord, your employer as well as you bank, online shopping site and of course casinos.

Again, during your bankruptcy the administrator will look into everything, really everything, which can bolster the financial funds to repay the highest possible percentage to your creditors. From your account/card statements he will be able to see that you deposited at online casinos/betting sites or uploaded to e-wallets and he will ask for statements to see whether there is money to be collected.

RichyJ75 said:

I regularly review my credit file (free of charge through www.noddle.co.uk) and can see searches from various casinos logged as 'Anti-Money Laundering' searches. To name a few, Mr Green, WHG, Co-Gaming ltd, Profitable Play, Gala and Paddy Power all enquire on credit files and have left their mark. Bit strange that some of them enquire on a regular basis, but no problems anywhere.

Also, bankruptcies are all in the public domain and readily available on the Insolvency Register (free of charge), so casinos can easily check this if they so desire without the need to look on credit files.

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You can see these searches, but like ID searches, they don't leave a footprint that makes it appear that you have made multiple applications for credit. The main reason for the rules is that otherwise people would never be able to get credit because of all the clutter of ID and anti money laundering searches. It is applications for credit that should leave a visible marker because multiple applications in a short space of time can mean that someone is beginning to struggle, and this of course means an increased risk to any lender.

Whilst bankruptcies are in the public domain, do casinos actually bother to search on every player that signs up and deposits? Whilst access may be free, the casino would still have to pay staff to do the checks, and it has already been argued that casinos can't even KYC customers at the point of registration as the cost burden is too great, hence it is done when they first withdraw, or deposit a substantial amount in total, around the £1000 to £2000 mark, depending on the terms of their licence and internal policies.

Official receivers here do have to power to recall money that has been paid out prior to someone going bankrupt, even if at the time it was a payment of a legitimate charge or debt rather than an attempt to hide money. This may well mean that casinos would have to return money that a bankrupt actually played and lost, rather than just what they have in their account.