Archive for the tag 'Ethics'
The Alderney Gambling Control Commission: you follow the rules but you still don’t get paid. Why bother with regulation at all?
Caruso July 31st, 2008
Online gambling regulation by accountable governmental bodies is a good thing for one reason and one reason alone: it offers protection to the player. There are many reasons why it’s good for the industry in terms of profit and image, but all that is irrelevant if the player side is missing from the equation, as without the player there is no industry.
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I outlined serious flaws in the Malta Lotteries And Gaming Authority in my LGA article a few weeks ago. In recent days a regulator much closer to home has come into the spotlight. (The following appears in moreorless the same format in the Alderney Gambling Control Commission article on my own site.)
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The Alderney Gambling Control Commission oversees remote gambling within the states of Alderney in the Channel Islands. In the blurb on the homepage we find the following:
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The Commission ensures that its regulatory and supervisory approach meets the very highest of international standards.
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Excellent.
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So, does this have any practical relevance to the player?
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As reported at Casinomeister, in early July 2008 a player deposited at one “PKR Casino”, receiving a signup bonus in the process. The next day he was tempted to re-deposit with another bonus invitation, after which he cashed out his balance.
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Three days later, the casino revoked his bonuses on the basis of “bonus abuse”:
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After a thorough review of your account it is evident that you have abused the PKRCasino Reload bonus. You have now been permanently banned from PKR and all funds gained by abusing the reload bonus have been seized.
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Since the player had infringed no terms, he appealed to the Alderney Gambling Control Commission. A week or so later the Commission released the following quite breathtakingly atrocious findings:
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You made two large deposits, $200 and $500. The first deposit of $200 is the maximum eligible amount for a first time deposit bonus. The second deposit is again the maximum eligible amount for reload bonus.
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As soon as the bonuses were cleared you requested a withdrawal, each time within five minutes of clearing the specific bonus.
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You did not engage in any play between the first withdrawal and the second deposit when the reload bonus became available.
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The only game you played was casino hold em.
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The vast majority of the bets you made were the minimum $1. This is quite a small bet amount when compared to the amounts that you deposited. Only the basic main bet was played, never the side bet (AA bet).
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The total amount you bet on the account was $20,002.00, this reflects the $10,000 bet to claim the first deposit bonus and then a second $10,000 to claim the reload bonus. It is clear that as soon as the bonus was released no more games were played.
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Play only occured while a bonus was pending.
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The Commission has thoroughly investigated your claims and are found to be in agreement with PKR Limited’s decision to exclude you from their site. On obtaining details of your game play it’s apparent that you have abused the bonus scheme that was offered to you.
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In accordance with sections 9 and 10 of PKR Limited’s terms and conditions, of which you agreed to adhere to at all times, they are more than within their rights to close your account and seize all funds
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Here is section 10 of the above-mentioned terms and conditions:
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PKRCasino reserves the right to withhold any bonus payment if it believes that the promotion has been abused and/or where the terms of the offer are not fulfilled, or any irregular wagering patterns are found.
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So, according to the Alderney Commission:
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The player played no disallowed games.
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The player made no disallowed wagers, or disallowed wager sizes.
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The player did not wager less than the stipulated amount.
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In short: the player broke absolutely none of the rules of the contract.
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PKR does not define “abuse”, nor “irregular wagering patterns”; PKR does not, in fact, state that it must be unequivocally sure about this apparent abuse, only that it must believe that the undefined indiscretion has occured. And if PKR Casino believes that something which they cannot define may have happened, they reserve the right to confiscate players’ money.
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This must count as just about the most vague, inadequate and frankly risible condition you could find in a contract. Why not just say “we’ll keep your money if we don’t like your name”? Or “…if there’s a ‘y’ in the month”? Or “…on Tuesdays”?
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Would such absurdities be any more ludicrous than guesswork about a non-defined activity?
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And yet, the Alderney Gambling Control Commission endorses this condition.
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This is a precedent-setting move, as it sends a message out to players that casinos under Alderney jurisdiction may confiscate their legitimately-earned funds with absolute impunity, safe in the knowledge that the AGGC will do nothing to stop them.
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As such, I would like to ask the AGCC the following questions:
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1) Since a straight observance of all the stated rules is not acceptable to you, precisely what would a player need to do to earn his full cashout at one of your licensee casinos WITHOUT incurring your displeasure? Which additional rules would you have a player observe?
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2) You appear unhappy with the playing of just the one game; how many, and which, additional and unstated games would one need to play to earn a full cashout, and why do you not require that the casino list them?
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3) You appear unhappy with issues of betsize; what betsize is acceptable to you, and why do you not require that the casino list it?
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4) You appear unhappy with strict observance of the required wagering; how much additional wagering do you consider acceptable and why do you not require that the casino state this?
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5) You appear unhappy with the timescale of withdrawals (”within five minutes…”); how soon after requirements are met is acceptable to you for withdrawing, and why do you not require that the casino state this?
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6) You appear unhappy with the lack of play occuring outside of bonus requirements; how much additional play is acceptable to you, and why do you not require that the casino state this?
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Lastly,
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7) Why in the name of heaven can a player abide by all the given rules and not be paid in full?
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I hope that at some point the AGCC will address these points, as it seems clear that a player who simply follows the stated rules is guilty in their eyes of an indeterminate indiscretion.
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There is nothing new about incentivising bonuses - they occur even in the UK banking sector. Take a look at the Alliance And Leicester esaving account:
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Earn 6.50% AER (variable), this rate includes a 0.88% bonus payable until 31 August 2009
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The bank uses a bonus to boost the customer’s interest, giving them a nice, catchy headline rate. They may lose money on the bonus, but the idea is that the new customers they’ll gain will more than compensate for the loss. If the customer shamelessly empties his account when the bonus period expires and goes elsewhere, the bank does not confiscate the bonus funds. If they did, it would put them in quite monumental breach of UK law. And at the end of the day, why would they? - they should still make money overall.
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The exact same marketing concepts govern bonuses offered by online gambling operations: “give ‘em money and you’ll make money”.
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So if a profit-motivated customer of a UK bank cannot have his funds unfairly confiscated, why can similarly focussed customers of an operation under the jurisdiction of the Alderney Gambling Control Commission be subject to such outrageous treatment?
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Well, here’s where it get’s interesting.
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The answer is that there is nothing in Alderney law which prevents it.
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In the UK and across many, if not all, other EU countries, trading standards legislation does not recognise the legality of anti-customer clauses in contracts - take a look at the Unfair Terms in Consumer Contracts Regulations 1999:
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If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail…An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer…The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term.
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One example of an unfair term is given as:
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“…giving the seller or supplier…the exclusive right to interpret any term of the contract
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You can see how this legislation would make it difficult for a business to hold customers to clauses like “we reserves the right to withhold any bonus payment if it believes that the promotion has been abused”.
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Unfortunately, there is no trading standards legislation in Alderney, and as such nothing that protects the consumer from unfair practice - take a look at the “fair trading” section of the States Of Guernsey trading standards page of the Guernsey government website:
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In March 2000 the States of Guernsey approved the introduction of legislation relating to the sale and supply of goods and services, unfair contract terms, misrepresentation and the disposal of uncollected goods. This legislation is at the stage of preparation and subsequent introduction
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I spoke to the Guernsey trading standards office yesterday, and they confirmed that this is still the case - this legislation, though in the pipeline, is still not in place in 2008, fully eight years later!
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I also spoke to the State Office of Alderney, and they confirmed that the same applies: there is no trading standards legislation in Alderney.
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So where does this leave the player, on the receiving end of an outrageous decision issued by the Alderney Gambling Control Commission?
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During my afternoon of phone conversations with the various Channel Islands public bodies, the Alderney Greffier pointed out that there is an appeal process listed in the 2006 eGambling Ordinance (see page 21, “appeals”). However, she acknowledged that this is a potentially rocky path:
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Acceptance of the appeal request is down to the court itself.
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Alderney solicitors charge upwards of £400 an hour, making the pursuit of anything other than very large sums completely self-defeating.
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Exactly what would happen as a result of a successful appeal is by no means guaranteed in terms of customer satisfaction.
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Lastly, in the case of an appeal against unfair contract terms, when there is no actual law prohibiting such terms in the first place, it requires quite a stretch of the imagination to think that the court might find for the customer on that basis!
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As such, appealing against a decision from the Alderney Gambling Control Commission is most likely an exercise in extreme pointlessness.
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None of this should even be remotely necessary; an ostensibly respectable and competent governmental body should not be taking decisions based on what a customer might have done in relation to undefined, and frankly undefinable, terms - this is grossly unprofessional and grossly unfair. Vague talk about “bonus abuse” is the stuff of the lowest level of online casinos; it’s unthinkable that a governmental regulatory body would talk in the same manner. A serious regulator needs to take fair and balanced decisions: did the customer break any clearly defined rules? If so, he should not be paid. If not, he should receive his money; if he does not receive his money having broken no rules, then action against the operator should be forthcoming, up to and including the revocation of the operator’s license.
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Not so in the case of the Alderney Gambling Control Commission. What did they say? It bears repeating:
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it’s apparent that you have abused the bonus
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What is the lesson that players can take away from all this?
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Well, take your chances by all means; a lot of the Alderney-based casinos are decent operations so you’ll probably be alright. But remember that if you are NOT alright, if you accept a promotional bonus, on the casino’s specific invitation as part of their marketing campaign to snag your deposit, and you cash out only to then find you’re the subject of ill-defined accusations of unacceptable behaviour you apparently may have indulged in, then you can expect no quarter given from the Alderney Gambling Control Commission on the basis of their performance in this case.
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This was, I think, a test case for the AGCC, the first one of its kind that’s been in the public domain.
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What a shame they fell at the first fence and set standards in online gambling back about ten years.
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What is the point of “regulation”, if the reality is this?
Extreme Prediction Markets & Ethics
Chris F. Masse May 30th, 2008
While Robin Hanson was busy signing Bob’s petitions and blablabling on philosophy, Jason Ruspini answered the questions.
Jason Ruspini (”The Brain”) has established himself as one of the experts in the field of prediction markets. Listen up.
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1-2) These markets could have insider trading restrictions and forced settlement w/ new contract set.
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3-4) The CFTC/NFA could monitor a “large trader” list and have special reporting requirements for them. If trading seemed unreasonable given the objective outlook for a candidate, they could begin an investigation.
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5) Don’t void or unwind the market, just settle the contracts at the price immediately before the event and then start a new set of contracts as soon as possible.
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The only problem there is what happens when a price manipulation precedes an event such that the manipulated outcome locks-in the “manipulated” prices. The arrangements in 3-4) would go a long way towards addressing that scenario. Failing that, contracts could be worded in such a way to allow for freezing funds and unwinding trades in that sort of situation. Also, it would be difficult for a trader to set-off a feedback loop in a liquid binary market even if they were very large.
How BetFair markets are settled in the situation where their integrity team are unhappy about some aspect of the betting on that event
Deep Throat May 12th, 2008
If suspicious betting is detected then the winnings of the specific accounts in question are frozen until such time as BetFair have had the chance to investigate and determine one way or the other. That has no effect on BetFair’s ability to settle the market for every other customer. If one trader has placed a bet on a match in good faith, that trader’s bet wins, and there’s a subsequent investigation, there is no reason whatsoever to disadvantage that trader by withholding settlement, particularly as a full investigation could take weeks.
That applied for the Hernandez v Brezezicki match.
BetFair’s message to the UK’s Gambling Commission on betting and the integrity of sports
Chris F. Masse May 10th, 2008
Via Medemi (109 comments on their thread, and still growing), BetFair (PDF file):
3 August 2007
Integrity in Sports Betting Issues Paper Consultation Co-ordinator Gambling Commission Victoria Square House Victoria Square Birmingham B2 4BP
Dear Sir/Madam,
INTEGRITY IN SPORTS BETTING ISSUES PAPER - BETFAIR RESPONSE
I am writing on behalf of Betfair in response to the Commission’s “Issues” paper of May 2007 but have restricted this response to those questions in the paper on which Betfair has a strong view. The questions from the Commission’s paper are reproduced below in italics, followed by the Betfair response.
• What evidence is there of the incidents giving rise to concern about the integrity of sports betting in Great Britain?
• Are additional measures necessary and appropriate to uphold integrity in sports betting in Great Britain and if yes what are they?
• What is the detailed breakdown of their cost?
The evidence suggests that incidents giving rise to concern about the integrity of sports betting in Great Britain are few and far between. This is perhaps contrary to the perception created by the media and skewed somewhat by the ‘purge’ that is taking place in British horseracing.
Betfair believes that the internal measures it has in place, together with its formal agreements with sporting regulators are necessary but sufficient to uphold the integrity of betting through the Betfair exchange. The cost of ‘policing’ a sport is not something Betfair is able to comment on, but by way of comparison, Betfair’s integrity department (which covers all sport globally) is 7 strong with an annual budget of around £250,000.
• Should each type of bet in each sport be risk-assessed? If so, by whom?
• Do you consider some types of betting to present a greater risk of the integrity of sport than others?
• If you consider some types of bets to be riskier than others, should further measures be taken to regulate them?
• Should the Commission require the gambling industry to offer only certain categories of betting opporunities?
A risk assessment of each bet type is something which any betting operator would carry out as a matter of course. A betting exchange is reliant on the confidence of its customers that the markets it offers are fair, so will not want to offer a market which is perceived as open to corruption.
Some types of bet do present a greater risk to the integrity of a sport and they are generally those bets that occur within a sporting event as opposed to the outcome of the event itself.
In these cases it is perhaps the performance of one player that could be influenced for commercial gain. However, the vast majority of these types of bet have historically been offered by the spread betting firms (‘player performance’ indices most obviously) who will not be regulated by the Commission.
It is Betfair’s stance not to offer markets which pose integrity and/or perception concerns for sporting regulators. What might constitute such a market can be established through consultation with the sports and historically Betfair has taken the decision not to offer certain markets after such consultation. Betfair would always advocate a voluntary code of conduct between betting operators and sports governing bodies in this matter.
Restrictions imposed on betting operators in this area by the Commission (or any veto given to the sporting regulators) would obviously put UK licensed operators at a competitive disadvantage against operators not licensed by the Commission. In addition such restrictions would be undermined by the fact that they would not apply to spread betting firms and nor would they apply to betting operators in other EEA States who (pursuant to s.331 of the Act) would be allowed to advertise a betting market into the UK that a UK operator was not allowed to offer.
• Would integrity in sports betting be improved if there was a single source of results for each UK sport and if so, how do you suggest this might operate?
In short, no. The final result of any event is almost always taken from the governing body. The collection, presentation and distribution of sports results is an entire industry in itself. The speed with which results are available has to be balanced by accuracy and Betfair considers the data providers in place now, to be more than adequate. In Betfair’s experience customers do not have concerns with the sources used to settle markets providing the details of those sources are clearly stated within the operator’s rules.
Please let me know if you have any questions or require further clarity in relation to any of the above.
Yours faithfully,
David O’Reilly Legal Counsel
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The UK’s Gambling Commission is keeping this issue under review. (PDF file)
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“Prediction Market Hustler” = an event derivative trader (with bad ethics) who takes advantage of less skilled traders in real-money prediction markets.
NUCLEAR SCANDAL: HubDub allow their traders to bet on celebrities’ death.
Chris F. Masse April 1st, 2008
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If the question is potentially contentious (e.g. about loss of life) then it must be in the context of a mainstream news story.
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Color me perplex.
Is the BetFair marketing message a big lie?
Chris F. Masse March 19th, 2008
Rab Bibater’s comment on Midas Oracle:
[...] BetFair needs to nip the current round of noise in the bud once and for all. It needs to clarify its own advertisements, in which it states that “Because you are betting against other punters, ‘you could’ get better value;” which in the light of alleged revelations that its trades in its own markets, would seem to amount to a misrepresentation. [...]
Hummm… For each of 100 trades made on BetFair, how many are made by real-people “punters” and how many are made by algorithm-advised BetFair Malta? (I have just sent this question for their today’s Q&A. 
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YouTube: BetFair’s TV ad in the UK
No more anonymized trading data, please. State your source(s).
Chris F. Masse January 24th, 2008
I think that’s the takeaway from the BetFair blog fiasco.
My questions are still unanswered this morning. What data was used to concoct that dithyrambic write-up about the predictive power of the “betting markets” on the 2008 US primaries and caucuses (and in particular the Michigan race)? BetFair? If so, please, send me the expired charts. InTrade? Another source? A cocktail of sources? Please, cite everything, so we can check.
I will blog about this issue, every day, till it is resolved —one way or another. I’m resilient.
I’ll blog about this BetFair blog fiasco for the whole year of 2008, and more, “to infinity and beyond” (as said Buzz LightYear in Toy Story), if that’s what it takes to get answers from Hammersmith and Nottingham. Those folks are as voluble as yellow canaries, usually, when it comes to touting their wares. Cat got their tongue? What data did they use for their dithyrambic blog post? Is that so confidential?
