Should You Keep Money In A Betting Account?

piggy bank on its side with a couple of coinsPlenty of people have a good grasp of what’s in their betting account, depositing and withdrawing money as necessary in order to allow them to place the bets that they want. Some people, on the other hand, don’t really know how much money is in their accounts and don’t bother to withdraw winnings when the bets that they’ve placed have come home. Whilst there is no ‘right’ answer, the former way of operating is safer than the latter.

The truth is that betting accounts are not banks, so your money does not have the same protection as it would if you left it in your bank account. The best way of operating is by bringing money into your account for the bets that you want to place and taking it out if you win your bets. Obviously this mostly depends on how much you’re betting and winning, but it’s a good rule of thumb.

Of course, if you know you are going to place more bets in the coming days, weeks or months there is a temptation to just leave the funds in there.  In the vast majority of situations this is never going to be an issue but remember gambling companies do occasionally enter administration and do not always come back out.  There is often little warning that a site is going under until you try to login and find your account is locked so it is always safer to withdraw, especially if we are talking about three figures or more of cash.

Betting Companies Aren’t Financial Institutions

protect fundsThe most important thing to bear in mind when it comes to where you’re keeping your money is that betting companies are not financial institutions and therefore don’t offer the same protections as them. It’s something that not everyone realises, but there are different levels of protection that are offered by online betting companies and even some of the biggest and best-known ones don’t offer the highest level of protection.

Though plenty of betting companies keep money from customers in a separate account to the company’s main accounts, they would still form part of the assets of the business in the event that the company in question went under. It is all perfectly legal, with the United Kingdom Gambling Commission declaring that betting companies simply have to meet one of the levels of protection in question and inform their customers of which one they have.

There is a High, Medium and Low level of protection in place for gambling companies, with Low meaning that the deposits in customers’ accounts are at risk of being taken by an insolvency firm. Medium offers some protection, such as insurance, but not a guarantee that funds are completely safe, with only High protection fenced off in the event that a company becomes subject to insolvency proceedings and administrators or liquidators get involved.

Be Sensible

Thumbs UpWe’d all like to think that our money is safe and secure with our bookmaker or online casino, but the reality is that such things are far from certain. The first thing that you should do is check out the level of protection for your funds offered by your bookmaker, even if they are one of the well-known and reputable ones that have existed on British high streets for decades, just to make sure.

You may have to dig through the terms and conditions to find this information but all licensed bookmakers, casinos, bingo operators, etc., will provide it.  Do not assume either that the big brands will have high protection and the little brands low protection, that is certainly not the case.

If they have a low level of protection in place then you’ll want to have as little of your money in there as possible. It might seem as if everything is perfectly fine, but we never really know what is going on behind the scenes at a business. The last thing you’ll want is for your company of choice to go bust and all of the money that you’ve got in your account to be lost, so don’t take the risk.

At the end of the day, your money will not gain interest in a betting account in the same way that it would in a bank account, so why would you want to leave it in there in the first place? It’s also worth bearing in mind that deposits are virtually immediate nowadays, so you’re not going to be limiting how quickly you can place a bet by having your funds removed from your account and safe in your bank.

Obviously you’ll know how much money matters to you and how annoyed you’d be if you lost some, so think carefully about what is an acceptable amount to have in your account. If you’ve got £10 in there then that’s one thing, but if you’ve got £1,500 and don’t plan to make such a large bet any time soon then that’s something totally different and it would be sensible to withdraw the majority of the money into your bank.

The final point to mention when it comes to ‘being sensible’ is that money sitting in an account is at risk of being used for foolish reasons. We’ve all heard the expression ‘burning a hole in your pocket’, so it’s not outrageous to suggest that you might well decide to place some bets that you haven’t thought through simply because the money is there in your account. Worse still, it could lead to a cycle of problem gambling.

The MoPlay Example

moplay site suspended signThe tale of the betting company MoPlay is an interesting one, up to and including the fact that their guarantors were taken to court by Manchester United over unpaid sponsorship money. The Gibraltar-based company had its operating licence suspended by the regulator in Gibraltar as it was unable to pay its liabilities, going insolvent just a few days later. That was a major issue for customers that still had funds in their accounts.

Not long after the regulator suspended the licence of the parent company, Addison Global, the UKGC followed suit. Obviously a wealth of punters then went to try to withdraw their funds, only to find that the company was not allowing funds to be withdrawn from accounts. Those customers had nowhere to turn, given that MoPlay had been clear about what would happen in the event that the company went bust.

Clause 9 of MoPlay’s terms and conditions stated,

“If there was ever a situation where we became insolvent, your funds would not be considered separate to the other company assets and you may not receive all your funds back.”

This is something that not all punters are aware of, often incorrectly believing that as long as they’re betting with a company that holds a licence from the Gambling Commission their funds will be safe. They aren’t, as the MoPlay example readily helps people realise.

In the end Betfred bought the MoPlay account based and honoured the liabilities, but that is by no means something that will happen every time.  Customers also had to wait a long time to get money back.