Another useful aspect of the likes of Moneybookers and Neteller is their incorporation in the UK, putting then under the control of the FSA and answerable to all aspects of UK law, including the 1998 Data Protection Act. They have access to a considerable amount of sensitive customer data – credit cards, bank accounts and all manner of identity verification documentation – so the tight legal framework they are bound by is important for customer peace of mind.

But how secure is the data?

Just over a year ago I started having doubts, when a Moneybookers customer reported that his account had been closed on the basis of information received from a casino client, but without ever being notified by Moneybookers as to exactly what the information was – I reported on this my Moneybookers: potential breach of UK law article.

If you look at the “rights of data subjects” section of the Data Protection Act, this bit jumps out:

7 Right of access to personal data

(1) Subject to the following provisions of this section and to sections 8 and 9, an individual is entitled -

(a) to be informed by any data controller whether personal data of which that individual is the data subject are being processed by or on behalf of that data controller,

(b) if that is the case, to be given by the data controller a description of -

(i) the personal data of which that individual is the data subject,

(ii) the purposes for which they are being or are to be processed, and

(iii) the recipients or classes of recipients to whom they are or may be disclosed,

(c) to have communicated to him in an intelligible form -

(i) the information constituting any personal data of which that individual is the data subject, and

(ii) any information available to the data controller as to the source of those data

It seemed to me that these clauses had been breached, as the data had not been disclosed to the “data subject” – customer – in question.

More recently, another possible breach came to my attention: the customer of one Cherry Red Casino had winnings confiscated on the basis of information apparently received from Moneybookers. I requested and reviewed his email correspondence with the casino in question, and posted extracts in my Cherry Red Casino and Moneybookers article. Most worrying was this revelation:

We have worked closely with third parties to ascertain which players are genuine and which are fraudulent and yours has come back as being connected to other players in Europe and as having transferred funds between Moneybookers accounts.

We are certain that the information we had received from Moneybookers and third parties constitute to the answers we have given players.

So, confidential information of some kind or another was evidently disclosed, by the payment solution to the gambling operation, with no notification to the player.

Another player reported publically, on another similar case, in the Gambling Industry Association Rushmore Casino discussion. Here, an affiliate representative gave a little more detail about the nature of the information:

Moneybookers…only confirmed with us which Moneybookers email addresses were linked and had transferred funds between themselves, it was a yes or no answer and included no further private or confidential banking information or otherwise. Moneybookers…confirmed that these accounts were in fact connected and…transferred funds between their accounts also.

There are a few problems here.

In the first place, confidential information is supposed to be genuinely confidential, and informing a third party of aspects of a customer’s account and the people to whom they make transfers is not an aspect of “confidentiality” that I am aware of. The customer in question was at no point notified by Moneybookers of the disclosure, in whatever format, of his account details to third parties.

I am not a lawyer, but this does not look right to me, insofar as it appears to contravene the section of the DPA that I quoted above.

In the second place, and marginally off the question of confidentiality but highly relevant to customers of these payment solution providers and the industry as a whole, is that this information may be leading to bogus conclusions – the fact that Customer A transfers funds to customers B and C does not necessarily make Customer A guilty of an illegal act. Whether or not the customer is guilty, the correlation between the guilt and the account activity in question is by no means absolute.

Here is a possible scenario:

Casino: “We believe these two players are connected (and therefore guilty of activities we do not allow); can you confirm this?”

Moneybookers: “Yes; the two accounts in question have transferred and received funds”.

On this basis, to summarise my above points:

1) This disclosure to a third party of a customer’s account activity may be leading to entirely erroneous conclusions.

2) More importantly: at no point was the customer – or rather, customers – informed of these behind-the-scenes information exchanges. This appears to me, in line with simple reasonable behaviour, unacceptable, as one ends up being convicted with no right of defence. But more importantly, the nature of the disclosure in question does not appear to me to adhere to the laws I quoted above.

I have, myself, carried out a few “person to person” transfers with Neteller, the payment solution I use. I would hope that Neteller never disclose this aspect of my account, or any other, to third parties.

Whether or not Moneybookers discloses aspects of my account to third parties is irrelevant to me. I no longer use their services.

I will be forwarding this article to Moneybookers for their comments.

-

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.)

-

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:

-

The Commission ensures that its regulatory and supervisory approach meets the very highest of international standards.

-

Excellent.

-

So, does this have any practical relevance to the player?

-

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.

-

Three days later, the casino revoked his bonuses on the basis of “bonus abuse”:

-

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.

-

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:

-

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.

-

As soon as the bonuses were cleared you requested a withdrawal, each time within five minutes of clearing the specific bonus.

-

You did not engage in any play between the first withdrawal and the second deposit when the reload bonus became available.

-

The only game you played was casino hold em.

-

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).

-

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.

-

Play only occured while a bonus was pending.

-

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.

-

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

-

Here is section 10 of the above-mentioned terms and conditions:

-

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.

-

So, according to the Alderney Commission:

-

The player played no disallowed games.

-

The player made no disallowed wagers, or disallowed wager sizes.

-

The player did not wager less than the stipulated amount.

-

In short: the player broke absolutely none of the rules of the contract.

-

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.

-

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”?

-

Would such absurdities be any more ludicrous than guesswork about a non-defined activity?

-

And yet, the Alderney Gambling Control Commission endorses this condition.

-

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.

-

As such, I would like to ask the AGCC the following questions:

-

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?

-

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?

-

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?
-

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?

-

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?

-

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?

-

Lastly,

-

7) Why in the name of heaven can a player abide by all the given rules and not be paid in full?

-

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.

-

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:

-

Earn 6.50% AER (variable), this rate includes a 0.88% bonus payable until 31 August 2009

-

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.

-

The exact same marketing concepts govern bonuses offered by online gambling operations: “give ‘em money and you’ll make money”.

-

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?

-

Well, here’s where it get’s interesting.

-

The answer is that there is nothing in Alderney law which prevents it.

-

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:

-

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.

-

One example of an unfair term is given as:

-

“…giving the seller or supplier…the exclusive right to interpret any term of the contract

-

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”.

-

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:

-

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

-

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!

-

I also spoke to the State Office of Alderney, and they confirmed that the same applies: there is no trading standards legislation in Alderney.

-

So where does this leave the player, on the receiving end of an outrageous decision issued by the Alderney Gambling Control Commission?

-

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:

-

Acceptance of the appeal request is down to the court itself.

-

Alderney solicitors charge upwards of £400 an hour, making the pursuit of anything other than very large sums completely self-defeating.

-

Exactly what would happen as a result of a successful appeal is by no means guaranteed in terms of customer satisfaction.

-

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!

-

As such, appealing against a decision from the Alderney Gambling Control Commission is most likely an exercise in extreme pointlessness.

-

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.

-

Not so in the case of the Alderney Gambling Control Commission. What did they say? It bears repeating:

-

it’s apparent that you have abused the bonus

-

What is the lesson that players can take away from all this?

-

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.

-

This was, I think, a test case for the AGCC, the first one of its kind that’s been in the public domain.

-

What a shame they fell at the first fence and set standards in online gambling back about ten years.

-

What is the point of “regulation”, if the reality is this?

[...] The complicated state of US law

The always fascinating subject of American state and federal law as applied to online gambling was next on the agenda, with US gaming lawyer and respected author Martin Owens and the more recent personality arrival Edward Leyden of iMEGA in the hot seats.

Owens ran over the ‘curious’ nature of state vs. federal law in the United States, detailing the complexities and inconsistencies and the apparent predilection of the enforcement authorities to harass and intimidate vulnerable targets rather than focusing on issues of US law that remain unresolved.

He predicted increased demand by individual states for some involvement in Internet gambling and the revenues it can raise. “Internet gambling is not dead in America,” he asserted.

Trade association iMEGA’s president Edward Leyden said that his organisation represented the wide interests of entertainment that included online gambling, insisting on the fundamental right for adults to engage in entertainment that may include online gambling.

He went on to give an impassioned summary of his organisation’s activities to date, primarily in taking the federal government to court on the UIGEA.

He praised Judge Mary L Cooper who is currently hearing the case and will make a ruling on iMEGA’s application for a restraining order on the UIGEA within the next 30 days as an erudite, fair and technology oriented official with conscientious attention to detail.

“Following the hearing last week, and without presuming to prejudge the issue, we came away feeling very confident in a fair and knowledgeable result from Judge Cooper,” he said before going on to discuss the just-published UIGEA regulatory proposals on which the government has invited comment by December 12 (see previous Online-Casinos.com/InfoPowa report)

Of the 52 pages published, only 16 deal with the actual regulations – the remainder was explanatory and indicated an attempt by the drafters to produce a fair and balanced document under difficult circumstances.

Leyden reminded the audience that many of the Congressmen voting on a security bill to which the UIGEA was attached at 2.30 am on the cusp of a Congressional recess late last year had not known what the attachment comprised.

More

Neteller found itself in the crosshairs due to the fact that it provided payment processing services to an astonishing 80 per cent of all online casinos, and processed over $7bn in transactions in 2005. The DOJ press release contrasted Neteller’s insouciant indifference with the docile response it got from competitor Paypal back in 2003, when Paypal coughed up $10m to avoid prosecution for facilitating these same kinds of transactions. Neteller PLC itself has yet to be charged with anything, though this was a pretty good shot across the bow.