Goods & Services question w/Poll

[P.V.]

I've been doing some studying, clearly have a reason but I won't go there.

I'd like some input from members and also casino reps. with the following question. Any replies are appreciated.
I really don't know the answer, just an opinion to the question so I need a jury.

My questions is this -

When a player sends money to an online casino isn't it true you are actually paying for goods & services? The reason I say paying for goods is because you're actually purchasing virtual goods when playing online games. Virtual chips, virtual coins and IMO are goods.

I understand the virtual winnings are exchanged to real money but do you agree with my opinion that sending money to an online casino is for the purchase of goods and services?

Here's a couple examples I found on the net -

1. Virtual goods are non-physical objects and money purchased for use in online communities or online games.

2. The fundamental difference between online and venue-based gambling is in the
degree of access and convenience it provides. The ability of the internet to allow
consumers to purchase goods and services from their own homes is generally seen
as a benefit of the technology. However, when the good being purchased (in this
case gaming products) carries a degree of risk, the increase in access can magnify
this risk.

 

[chayton]

I said yes because like going to a movie or a show, you aren't buying a tangible product. What you're actually buying is some entertainment which could be classed as a service. I think.

 

[spintee]

nether really thought of it, But I would certainly think that you will be buying service,

 

[KasinoKing]

Yes I agree, you are buying a SERVICE, not goods.

KK

 

[paul7388]

maybe you are buying a sevice but legally guess it wouldn't be classed as such. For example if I purchased a tv with my visa card in uk and company went bust id get a full refund as purchases are guaranteed by visa or if I paid for tickets to a concert by visa and never received them id get refund also. But if I deposited £200 in casino and it went bust a few weeks later before I played it I don't somehow think id get a refund from visa even tho I never got what I purchased lol.

 

[vinylweatherman]

maybe you are buying a sevice but legally guess it wouldn't be classed as such. For example if I purchased a tv with my visa card in uk and company went bust id get a full refund as purchases are guaranteed by visa or if I paid for tickets to a concert by visa and never received them id get refund also. But if I deposited £200 in casino and it went bust a few weeks later before I played it I don't somehow think id get a refund from visa even tho I never got what I purchased lol.

This might depend on the terms of your particular card. In the past, casino deposits were "purchases", and treated as such. Card companies now segregate casino deposits into the category "purchase of gaming chips", which is treated like a hybrid between a regular purchase and a cash advance. Many cards block the purchase of gambling chips in casinos that are not UK based and licensed, or offshoots of the well known high street brands (Ladbrokes, etc).

It's all governed under the Consumer Credit Act, which excludes a "cash advance" from being covered under joint liability. I suspect the card companies have rewritten their terms with a view to excluding Consumer Credit Act protection claims when casinos go bust. It does not necessarily mean that the courts or regulator will agree should such a case come up.

Card companies previously tried to exclude purchases made abroad from protection under the Consumer Credit Act, but the regulator had different ideas, and put a stop to it.

We know that one of the biggest problems for the industry is the "chargeback", so clearly card companies DO claw back casino related charges for their customers, even when it isn't justified.

The casino's own terms often describe the product as "entertainment" rather than "gambling" in an effort to exclude so called "professional players" in favour of "recreational players". This means the casinos themselves are describing what they provide as a "service" for entertainment, much like a subscription for home streaming would be a "service".

The problem for players is that only the price paid for the service would be covered under the normal interpretations of the Consumer Credit Act, so winnings from a bust casino probably could not be recovered from the card company. Gambling debt is now enforceable by law in the UK since the new Gambling Act came into force, so this muddies the waters somewhat, and it might be argued that a card company is jointly liable for any debt relating to a service purchased with the card. Bear in mind that only goods or services costing £100 or more are covered, so a casino deposit of £99 would not pass this first hurdle, regardless of the other arguments.

 

[dunover]

This might depend on the terms of your particular card. In the past, casino deposits were "purchases", and treated as such. Card companies now segregate casino deposits into the category "purchase of gaming chips", which is treated like a hybrid between a regular purchase and a cash advance. Many cards block the purchase of gambling chips in casinos that are not UK based and licensed, or offshoots of the well known high street brands (Ladbrokes, etc).

It's all governed under the Consumer Credit Act, which excludes a "cash advance" from being covered under joint liability. I suspect the card companies have rewritten their terms with a view to excluding Consumer Credit Act protection claims when casinos go bust. It does not necessarily mean that the courts or regulator will agree should such a case come up.

Card companies previously tried to exclude purchases made abroad from protection under the Consumer Credit Act, but the regulator had different ideas, and put a stop to it.

We know that one of the biggest problems for the industry is the "chargeback", so clearly card companies DO claw back casino related charges for their customers, even when it isn't justified.

The casino's own terms often describe the product as "entertainment" rather than "gambling" in an effort to exclude so called "professional players" in favour of "recreational players". This means the casinos themselves are describing what they provide as a "service" for entertainment, much like a subscription for home streaming would be a "service".

The problem for players is that only the price paid for the service would be covered under the normal interpretations of the Consumer Credit Act, so winnings from a bust casino probably could not be recovered from the card company. Gambling debt is now enforceable by law in the UK since the new Gambling Act came into force, so this muddies the waters somewhat, and it might be argued that a card company is jointly liable for any debt relating to a service purchased with the card. Bear in mind that only goods or services costing £100 or more are covered, so a casino deposit of £99 would not pass this first hurdle, regardless of the other arguments.

Great post bar the last bit highlighted.
ANY amount is covered should the retailer go bust or not provide goods/services paid for with a card. See section 75 of the CCA. Say you bought a holiday for 2,500 and paid 2499 CASH and a deposit or part-payment of just £1 on your card, you ARE protected for the WHOLE transaction should a dispute or problem arise...... Section 75 and a few other sections of the CCA are kept very quiet by card providers.

 

[vinylweatherman]

Great post bar the last bit highlighted.
ANY amount is covered should the retailer go bust or not provide goods/services paid for with a card. See section 75 of the CCA. Say you bought a holiday for 2,500 and paid 2499 CASH and a deposit or part-payment of just £1 on your card, you ARE protected for the WHOLE transaction should a dispute or problem arise...... Section 75 and a few other sections of the CCA are kept very quiet by card providers.

True, but this would still be a total cost of £2500, not £1.

There have been cases where people have bought several items from a company that went bust, but if the individual cost of each item was less than £100, they are treated as several non qualifying transactions, rather than a single transaction over £100. To get around this, the cardholder has to show that it is indeed a single transaction, perhaps by showing that all the items are connected, and can't be bought separately.

Indeed, some holiday firms have tried to beat the system by arguing that a holiday is actually a series of individual items costing less than £100, rather than a holiday as a whole costing over £100. They split flights, hotels, tours, etc into individual charges, and if they are all (or mostly) less than £100, the customer can't claim the money back through the card company under the Consumer Credit Act. I think this is another of those arguments that the regulator didn't support, and so no longer works provided the holiday is all booked as a package, and the total cost of the package is over £100.

With casinos, deposits would be counted as separate entertainment experiences, much like 10 trips to the cinema at £10.50 would be 10 separate £10.50 experiences, not a single service costing over £100, and thus not covered by the act. The question is, would the regulator agree? Purple Lounge is a case in point, going bust AFTER the gambling act became law, thus any outstanding debt could potentially be covered under the Consumer Credit Act. I haven't seen much publicity as to whether players who lost money deposited via credit card succeeded in claiming it back via the card issuers under the Consumer Credit Act. It's possible that the claims are on hold because the liquidation is not yet complete with regard to the Maltese arm that supposedly held the money.

 

[lotusch]

I might not buy physical goods,but if I go to a landbased casino I am also not buying physical goods.
I go there or play online because I want to have some fun and entertainment and this service is provided by either the landbased or online casino...

So yeah,I see it as buying some kind of a service.

 

[dunover]

True, but this would still be a total cost of £2500, not £1.

There have been cases where people have bought several items from a company that went bust, but if the individual cost of each item was less than £100, they are treated as several non qualifying transactions, rather than a single transaction over £100. To get around this, the cardholder has to show that it is indeed a single transaction, perhaps by showing that all the items are connected, and can't be bought separately.

Indeed, some holiday firms have tried to beat the system by arguing that a holiday is actually a series of individual items costing less than £100, rather than a holiday as a whole costing over £100. They split flights, hotels, tours, etc into individual charges, and if they are all (or mostly) less than £100, the customer can't claim the money back through the card company under the Consumer Credit Act. I think this is another of those arguments that the regulator didn't support, and so no longer works provided the holiday is all booked as a package, and the total cost of the package is over £100.

With casinos, deposits would be counted as separate entertainment experiences, much like 10 trips to the cinema at £10.50 would be 10 separate £10.50 experiences, not a single service costing over £100, and thus not covered by the act. The question is, would the regulator agree? Purple Lounge is a case in point, going bust AFTER the gambling act became law, thus any outstanding debt could potentially be covered under the Consumer Credit Act. I haven't seen much publicity as to whether players who lost money deposited via credit card succeeded in claiming it back via the card issuers under the Consumer Credit Act. It's possible that the claims are on hold because the liquidation is not yet complete with regard to the Maltese arm that supposedly held the money.

You miss my point here Vinyl - using section 75 bypasses any limits imposed by the card companies. And the PL claims would not be on hold because the card provider is legally obliged to PROMPTLY refund any unsatisfied transactions; customers cannot have them on charge and pay interest indefinitely. The card provider is the insurer. In the PL case the cardholders would have been refunded within a few days of PL going to ratsh!t, and if the card provider can retrieve the money from PL at a later date then that's down to the receiver or assets that can be realized and has no relevance to the card holder.
The point I am trying to make here is that if ANY part of a purchase is made with a credit card, the WHOLE amount is then covered by the CCA, so you are buying legal protection effectively by paying just a tiny fraction via cards. This is why some cards will not allow deposits on second-hand vehicles and home improvements.

 

[SkBurner]

My impulse reaction was to vote No. Trying to explain is the difficult part!

(Cash/debit card deposits) You mention chips as virtual goods, I see it as electronic cash same as my money in Neteller. In fact I find it hard to see the difference. My money in Neteller is not covered in the same way as having the money in my bank account here in the UK which would be covered up to £50,000 cash (I think) if they were to go belly up. So why should it be different for a casino?

Now credit card deposits are a whole different story. Not sure why it's even allowed as this could become very dangerous for any addict who doesn't know when to stop. It should be viewed as a cash advance and should also be part of your cash allowed portion of credit. I think some cards have a low max amount of cash withdrawals in relation to your overall credit limit.

<<clearly have a reason but I won't go there>> Why not? To understand your reason for the poll I think you would receive a better response.

 

[vinylweatherman]

You miss my point here Vinyl - using section 75 bypasses any limits imposed by the card companies. And the PL claims would not be on hold because the card provider is legally obliged to PROMPTLY refund any unsatisfied transactions; customers cannot have them on charge and pay interest indefinitely. The card provider is the insurer. In the PL case the cardholders would have been refunded within a few days of PL going to ratsh!t, and if the card provider can retrieve the money from PL at a later date then that's down to the receiver or assets that can be realized and has no relevance to the card holder.
The point I am trying to make here is that if ANY part of a purchase is made with a credit card, the WHOLE amount is then covered by the CCA, so you are buying legal protection effectively by paying just a tiny fraction via cards. This is why some cards will not allow deposits on second-hand vehicles and home improvements.

I am not missing the point. The £100 minimum is defined in the act, not by the card companies. There is also a max of £30,000 that doesn't really affect the average user of credit. You CAN pay £1 on the card and £99 cash and still be covered, but pay £1 on the card and less than £99 in cash and you are NOT covered because the total cost is less than £100.

To get full cover for casino deposits, you have to win the argument that ALL deposits during the life of the account count as a single purchase of goods or services. This argument doesn't generally work with tangible goods. Buy a cheap TV for £89 and a DAB radio for £30 and you have spent £119, but NONE of this is covered by the act due to each item costing less than £100.

If you buy a TV costing £110, but only pay £1 on the card and £109 by cheque, then yes you ARE covered.

I have noticed that many companies in the holiday and travel business try to deter payment by card by slapping on a 2.5% or more charge. If you pay for the entire holiday by card, this adds up to a large amount, and acts as a deterrent to many. Paying the deposit by card and the rest by cheque DOES give you protection for the ENTIRE holiday under the act, and companies only charge the 2.5% deterrent on the deposit, and many will waive this charge when only the deposit is paid, presumably because this gets them the sale right away by accepting the card, rather than have the customer seek to avoid it by leaving the premises to gather together the deposit by other means, and perhaps having second thoughts about the purchase. It's not usually possible to just pay £1 as many companies decide the amount of the deposit, and it's usually a percentage of the full price.

 

[Simmo!]

nether really thought of it, But I would certainly think that you will be buying service,

Snap.

 

[dunover]

I am not missing the point. The £100 minimum is defined in the act, not by the card companies. There is also a max of £30,000 that doesn't really affect the average user of credit. You CAN pay £1 on the card and £99 cash and still be covered, but pay £1 on the card and less than £99 in cash and you are NOT covered because the total cost is less than £100.

Not under s75 no, but you then use the 'chargeback' option which is a facility available with all card providers...

To get full cover for casino deposits, you have to win the argument that ALL deposits during the life of the account count as a single purchase of goods or services. This argument doesn't generally work with tangible goods. Buy a cheap TV for £89 and a DAB radio for £30 and you have spent £119, but NONE of this is covered by the act due to each item costing less than £100.

Where on earth did that come from??? Nowhere does the act say that you can't claim for a single problematic transaction after several satisfied transactions with the same retailer.
On the second point, you ARE covered if the items were connected by incentive, i.e. spend over 100 for a discount, or buy one item and get a third off of the cheaper one etc.!!
It is also worth noting that this has never been tested in a court case yet (linked items in a total purchase of over £100) because the card companies pay up as a rule.

If you buy a TV costing £110, but only pay £1 on the card and £109 by cheque, then yes you ARE covered.

And if you buy a TV for £99.99 you use chargeback......

I have noticed that many companies in the holiday and travel business try to deter payment by card by slapping on a 2.5% or more charge. If you pay for the entire holiday by card, this adds up to a large amount, and acts as a deterrent to many. Paying the deposit by card and the rest by cheque DOES give you protection for the ENTIRE holiday under the act, and companies only charge the 2.5% deterrent on the deposit, and many will waive this charge when only the deposit is paid, presumably because this gets them the sale right away by accepting the card, rather than have the customer seek to avoid it by leaving the premises to gather together the deposit by other means, and perhaps having second thoughts about the purchase. It's not usually possible to just pay £1 as many companies decide the amount of the deposit, and it's usually a percentage of the full price.

Nothing to disagree with there.

At the end of the day, whether chargeback or s75, you are essentially provided with a means to retrieve ANY amount spent on a card in which the transaction is not satisfied. That's all I'm trying to impart here.

 

[Googobucs]

I said yes. Services is easy. They are providing me with entertainment. Goods is not so easy to define in this situation, but I'm sure any good politician could twist the meaning to fit their own cause.
For me, goods has to be a tangible item and not cash won playing. I decided that comps given by casino's that can be exchanged for prizes were goods received. Weather you exchange them for free play, trinkets like tee shirts and hats or meals in a B & M. I felt like the comp was the "goods received" . I do remember back in the old days that some online places let you use comps for trinkets. Poker Stars comes to mind. I think I have a hat stuffed in a box some where.

 

[albrco123]

Had to go with No

Al

 

[Dinahnana]

Very interesting thread. I voted no because I feel I am buying a service. I pay to be entertained, kinda like a very expensive video game. Of course if I win then I could class it a service (only joking)
So I consider buying chips in a casino a service and the only way I would dispute a charge if the casino went belly up and absconded with my withdrawal.

 

[P.V.]

<<clearly have a reason but I won't go there>> Why not? To understand your reason for the poll I think you would receive a better response.

The reason behind the poll is to find out your thoughts as to whether when playing at an online casino you would consider it paying for goods & services or something else.

From the replies some that voted no think it's a service so I consider that a yes vote since it reflects both goods & services.

To be honest I'm studying uncharted ways for U.S. players to deposit at the newly launched casino's in New Jersey and Nevada and quite different than anything offered. That's about all I need to say because I don't want to be construed the wrong way.

Your replies are helpful with me defining goods and services within the online industry because I'm getting hung up on U.S. money transmitter laws.
It appears within the regulations that when it falls under goods and services you don't need to be a licensed money transmitter so I created the poll for input.

Money transmitter is not:

"Generally, the acceptance and transmission of funds only integral to the sale of goods or the provision of services, other than money transmission services, will not cause the person that is accepting and transmitting the funds to be a money transmitter."

All the comments and votes are appreciated.

BTW - Something I found through my reading is that U.S. casino's, which would include online are considered Financial Institutions by the BSA, interesting piece of information.

 

[Jasminebed]

Honestly, I'd be happy to see casinos only take payments by some kind of e-transfer (wallets, instadebit, debit cards) or pre-paid cards, U-Kash, etc.

If a customer goes to get a cash advance on their credit card in order to gamble, that's up to them (unwise, but up to them).

It is interesting to note that the pre-paid card offered by my bank charges a surcharge (same as cash "advance") on gambling transactions. Seems if I pay cash to load my card, then you shouldn't charge me to "advance" it. I didn't like the terms, so I chose not to take the card.

I don't know how it is in other places, but here I can't go to the cashier's cage and purchase chips with my credit card.