There is often a lot of confusion about how online casinos protect your money. You rightly want to know what happens to your money when you make a deposit into an online casino wagering account and what rights you have to your cash in the event an operator suddenly goes bust.
In the past, there have been instances where online casinos have used customer funds to help finance the business, especially in cases where they have struggled to properly manage cash flow and their own finances.
This, of course, is wrong – online casino operators should not use player funds to finance their business, and players should have their funds returned in the event the operator has to shut up shop amid financial difficulties.
But what requirements does the UK Gambling Commission place on online casino operators when it comes to protecting player funds? And what rights do players have when it comes to having their cash returned in the event a site is shut down?
We explain below.
UNDERSTANDING PLAYER FUND SEGREGATION:
Player fund segregation simply refers to the practice of holding money deposited by players in an entirely separate bank account to the one used by online casino organisations for their own operational and business funds.
In theory, this means that player funds cannot be used for the day to day running of the business, and that they are better protected in the event the operator enters insolvency. However, this does not guarantee funds will be returned to players.
The Gambling Commission demands operators segregate player funds as part of the requirements they must meet to obtain the necessary licence to accept players from the UK. But there are three different levels at which they can do this.
These levels are:
Let’s look at each in a little more detail.
BASIC: there is no extra protection other than your funds being held in a separate bank account. Money in these accounts would still be considered as part of the business if it went bust and you would be highly unlikely to have it returned to you.
MEDIUM: the operator has made arrangements, such as taking out insurance, to make sure that the money it holds on behalf of its players is returned in the event it enters bankruptcy. Again, there is no guarantee you will receive all or any of your funds if it goes bust.
HIGH: player money is held in a bank account that is legally and in practice separate from the rest of the company. This account is controlled by an independent person or external auditor. If the operator does go bust, your funds will be returned to you.
It is also worth pointing out that regardless to what level the online casino operator segregates player funds, your money is not protected by the UK government in the same way that personal bank accounts are.
WHAT TO CONSIDER WHEN IT COMES TO PLAYER FUND SEGREGATION:
The importance of player fund segregation will differ from player to player. If you deposit and play with small amounts of money, it will be less of a concern than if you are a high roller with thousands of pounds deposited at any given time.
Of course, regardless of the amount deposited you may just want to know that your cash is safe and secure in the event that the online casino you are playing at does go bankrupt. If that is the case, you should only wager at casinos that offer the highest level of segregation.
If you are not too bothered about the extent to which your money is protected, you can still take steps to ensure the online casino you are playing at its reputable and that it has proven to be trustworthy and transparent.
STEP ONE: play at an online casino that is well established and that is transparent about the business and the people running it.
STEP TWO: read the operator’s terms and conditions carefully as they will outline what happens to your money in the event it goes bust.
Alternatively, read our online casino reviews which go into detail about the level of player fund segregation offered and any other important information you may need to know.
STEP THREE: if you do play at a new online casino, or even an established one, deposit small amounts of money and if your wagering balance does become large, withdraw it.
STEP FOUR: trust your gut. If you don’t feel comfortable depositing or wagering at a particular online casino then don’t.
WHAT WE CONSIDER WHEN DEPOSITING WITH OUR OWN MONEY:
The majority of UK-licensed online casinos do not segregate player funds to the high level; some of the most established and trusted only do so to basic and medium requirements. But that’s not to say you shouldn’t take it into account when decided where to play.
When playing with our own money, we tend to favour online casinos that meet the medium level of player fund protection as we feel as though they have taken some additional steps to ensure our money is protected in the event they go bust.
We also look at how long the casino has been established and whether it is being operated by a reputable company that is open and honest about its business. If they are listed on a stock exchange, even better.
That’s not to say we don’t play at new online casinos because we do – some of the newest brands offer the highest levels of protection. Those that don’t we research a little more closely (we share all of our findings in our reviews) and simply deposit a smaller amount.
Remember, all of the online casinos we recommend are licensed by the UK Gambling Commission and do segregate player funds, even if only at the basic level.
If you have any questions about player fund segregation, don’t hesitate to get in touch with a member of the Find My Casino team here.