Online gaming: Watchdogs have woken up to a developing scandal

There are disturbing signs that winners are being conned. But it's not just the winners the Competition & Markets Authority and the Gambling Commission need to be worried about

Regulators have opened an investigation into online gambling (Rex)

At last the watchdogs seem to have woken up to the fact that you can gamble online, and that all might not be well in the virtual betting shops and casinos of Gibraltar and Malta where most people end up playing.

For years now there has been an impassioned public debate about betting shops, whether there are too many of them, and whether the bleeping, flashing fixed odds betting terminals (FOBTs), that can spoil the experience for those of us that occasionally stop by to bet on horses, aren’t actually a very bad thing.

This has led to higher taxes and sharper regulation, but it has also meant that some potentially nasty problems in the online space have ended up getting swept under the carpet like so many losing betting slips.

Everyone with a PC or a Mac, or a tablet or a smartphone, has a potential FOBT in their home or in their pocket. These mini FOBTs can even be persuaded to flash and bleep if that’s your thing. And they offer a great many more ways to lose money than just roulette, the staple of the ones you find in betting shops.

It’s not the losers, however, that have attracted the headlines now that the Competition & Markets Authority and the Gambling Commission have finally woken up to the fact that problems might have been percolating under their noses for years. It’s the winners.

Gambling outfits typically offer players free bets, matching deposits, enhanced odds and other sweeties for signing up. They will usually win them back, and much more besides, over time. Through what has been a long, and modestly profitable, gambling career, I can’t actually recall ever meeting someone who can claim to have won off a free bet But they surely must exist.

According to the CMA they do exist, but they’re not being treated very well. Gambling companies that offer freebies should, in theory, have to accept the risk that some people will win off them. So some of them have been stacking the deck to ensure that doesn’t happens. Sign-up offers sometimes come with terms and conditions so dense and complex that they’d make even Apple blush. As a result, if you do win you stand no more chance of getting the money out than a greyhound would of winning the Epsom Derby.

What, you want to complain? Good luck with that. Try calling between 2am and 2.01am when our Mumbai call centre will be open for you.

“Gambling inevitably involves taking a risk, but it shouldn’t be a con,” said Nisha Arora, the CMA’s senior director for consumer enforcement, who should give her press officer a bonus for coming up with the soundbite of the day. It’s no less true for that and if the probe kicks off a wider debate over how online gaming should be managed, so much the better.

There are 5.5 million in the UK people who gamble online. For most of us it’s a harmless pastime. Some of us even make a little money out of it. Some of us lose a bit.

However, it is not without its dark side. Betting shops are very visible, all the more so given the decline in other outlets on the high streets where they are often found. Online gambling is all but invisible. It is quietly possible for people to lose an an awful lot of money through it, and they are dong so. I’ve heard of online players having to remortgage their homes to pay debts because of the ease with which it is possible to click away a fortune.

So, no, it's not just the winners that the CMA and especially the Gambling Commission need to be worried about. It is not just the absurdly complicated T&Cs and the difficulty punters can have when it comes to making complaints.

I’ve written in recent days that while betting shop customers don’t generally attract much public sympathy, they deserve the same protections enjoyed by any other group of consumers, which is why the CMA’s impending decision to give the go-ahead to Ladbrokes' merger with Coral, in return for the cut-price sale of a few outlets, is so wrong. Whereas previously four chains controlled 87 per cent of the market, after the merger is complete that number will be down to three. The disposals are a fig leaf.

The CMA’s investigation into the online gaming world won’t right that wrong. But it might give the regulator the chance to earn back some of its spurs. And it might give the Gambling Commission the chance to affix some new ones to its hobnailed boots.