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Question Do players get paid if a casino goes bust?

Discussion in 'Online Casinos' started by nikantw, Apr 20, 2018.

    Apr 20, 2018
  1. nikantw

    nikantw Ueber Meister MM PABaccred

    Occupation:
    A bit of this and that
    Location:
    EU
    What UKGC says: You must register/login in order to see the link.

    "Any gambling business that holds customer funds must set out in their terms and conditions whether and how the funds are protected in the event the business becomes insolvent. Money staked or deposited with a gambling business is not protected by the government the way that personal bank accounts are.

    The information they provide lets you know what will happen to your money if they go bust, and this should help you decide who you want to gamble with. Online gambling companies in Britain must keep customers’ money in a separate account, but this does not guarantee you will get your money back if the company goes bust. They must explain in their terms and conditions whether your funds are protected and, if so, what level of protection there is. This should help you decide whether you want to gamble with that company and/or how much money you might want to leave in your account with them.

    Levels of protection
    There are three categories of protection for your money: basic, medium or high.
    The companies decide for themselves the category their protection falls into and explain their choice of category. They must include this information in their terms and conditions.We do not approve their assessment, but may we check the accuracy of the rating they have chosen. In each case customers’ money is kept in accounts separate from the business accounts. Where the ratings are different is in the amount of extra protection for that money.

    Basic

    No extra protection. Money in these accounts would still be seen as part of the business if it went bust.
    Medium
    There are arrangements (eg insurance) to make sure that the money in separate accounts is given to customers if the company goes bust.
    High
    Customers’ money is held in an account which is legally and in practice separate from the rest of the company. This account is controlled by an independent person or external auditor.

    The larger the amount of money which you hold with a gambling company, the more thought you should give to how that company protects it. You may wish to choose which company you use by how much protection they offer or spread your money across more than one company."


    Most casinos state in the terms that they have Basic protection, so your money will be seen as part of the business if it went bust. Under the UK law this is in simple words who gets paid 1st if a business goes bust:

    Do players get paid if a casino goes bust?: upload_2018-4-20_11-16-54.jpeg,Apr 20, 2018

    I am no expert, but I placed the players in the above pic where I think they stand, not just in UK but in any country (most good ones are based in Malta). Does anybody have more info on this?

    UKGC makes sure that the casino can pay, as long as they operate ok. That is what Basic does. But if they go bust there is no protection. And the thing is, a casino can go bust for a number of reasons and without a warning. Plus that most of them have limits as low as 10,000 / 30 working days dragging big payments for years (increasing the danger of something happening).

    Can't help remembering Purple Lounge.... :axeman:
     
  2. Apr 20, 2018
  3. Jono777

    Jono777 Meister Member CAG mm4 mm1

    Occupation:
    Self- Employeed
    Location:
    Wolverhampton
    The segregation of funds idea is for players benefits as best I understand it.

    The bottom line being that every effort will be made to pay outstanding balances / withdrawals should a casino go bust. Although nothing in this life is 100% guaranteed.

    FTR, I was a very regular player at Purple Lounge (more so in my up and coming days before I knew what I know today etc etc) - Had some delays towards the end but all withdrawals were paid in full (hundreds rather than thousands though)
     
  4. Apr 20, 2018
  5. nikantw

    nikantw Ueber Meister MM PABaccred

    Occupation:
    A bit of this and that
    Location:
    EU
    Bottom line is that with Basic protection no effort can be made. Other creditors have priority by law.
    Of cource a bust is not the same thing as when a casino closes (like 4 from 32Red group just did), in that case you are right that an accredited casino will always (even with Basic protection) pay all players.

    That being said I have to give credit to VS, V&J and All British for having Medium protection. That means they have players placed on top of the creditors list and their money secured even in case of a bust!
    Good job VS, V&J and All British! :thumbsup:
     
    Last edited: Apr 20, 2018
    Jasminebed and dunover like this.
  6. Apr 20, 2018
  7. aceking123

    aceking123 Ueber Meister CAG PABnononaccred MM

    Occupation:
    chippy
    Location:
    uk
    Not sure how it works , but just for the info side of things look at what happened with purple lounge fiasco , that went on a very long time.
     
  8. Apr 20, 2018
  9. BillyBonanza

    BillyBonanza Experienced Member webby

    Occupation:
    Accounting
    Location:
    Earth
    Only casino I completely trust in the industry is videoslots. You can argue about their reward system or their unreasonable policies about gift cards and verification (rightly so) but when it comes to trust factor, its one casino if I won 1 million dollars, i would go to sleep that night knowing I will get paid.

    Them having medium protection shows a strong level of leadership and responsibility throughout upper management. They could be cheap and greedy and pocket the extra money instead of paying for an insurance policy .. but instead it seems as though they are after the players best interests.

    I also think that in order for a casino to obtain a license they should be forced to have at the very least, medium. Why would a company issue a license to a casino that basically gives them an out not to pay a player if they won big? Seems counter productive.
     
    Tirilej and Harry_BKK like this.
  10. Apr 20, 2018
  11. Jono777

    Jono777 Meister Member CAG mm4 mm1

    Occupation:
    Self- Employeed
    Location:
    Wolverhampton
    Someone, somewhere, someday once told me "Never truly trust anyone 100%"

    May seem harsh but some of the best advice I was ever given :D
     
    adamtheaddict and SpinUk like this.
  12. Apr 20, 2018
  13. funnymunny

    funnymunny Sometimes here, always 'away' webby

    Occupation:
    CEO
    Location:
    Isle of Man, Macau or Vegas
    Over the last ~15 years, I have worked with most Regulators / licensing authorities in the industry and in this time, the Isle of Man is the only jurisdiction that can state that no player has ever lost money as a result of a company becoming insolvent. One of the key reasons why the IoM has been so successful in ensuring this record can be found in their legislation...

    "On the Isle of Man we make sure that all licensee's have a system in place which fully protects all player funds. This means that any deposits or winnings you have with an island regulated gaming firm are secure and can be enforced by law.

    ...

    Under the law, any money that is held in the Client Account is considered to belong to players. This means that if the operator cannot pay the players and the bank has been told that the operator is in difficulties by the Commission then the bank will only allow money to be paid to players from that point onwards. "

    You must register/login in order to see the link.

    This would be similar to the 'High' level of protection stated by OP, but unlike the UK, IoM licence holders are not given the option of whether to do this or not - it is a compulsory licensing condition.

    Key point also to note in the above quoted text, is that this is enforced by law, not just by the gambling regulator. As such, senior execs (Board Members, Directors etc), are personally liable if anything untoward happens. Sadly this hasn't been the case elsewhere where other Regulators have taken a 'light-touch' approach to protection of player funds... Whilst they say players are protected, there have been high-profile cases of this not happening. (As someone has already stated, remember Purple Lounge (Malta) and Full Tilt (Alderney) - in the latter incident, players were fully paid their balances, but only after the company was bought by Poker Stars (under their IoM licence)).
     
    Last edited: Apr 20, 2018
    ternur and nikantw like this.

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