There are some people that will often have quite large sums of money sat in their betting account, waiting for them to place another wager. Perhaps they have deposited a large amount in the first place, ensuring that they have their bankroll readily accessible to them whenever they might need it. Others may have seen a decent return come in on a bet that they’ve placed, content to leave it be in order to ensure that they’ve got something to work with in the future. It is also possible that they didn’t even realise that they’d won the bet.
Regardless of the reasoning behind it, there is no question that huge amounts of money sit in accounts belonging to punters who are either ignorant of its existence or else happy to let it remain there until such a time as it can be used. What a lot of people might not realise is that funds in betting accounts are not protected by law, meaning that if the company were to go bust then, depending on the betting company’s level of cover, the funds could well be used to help bail them out rather than be paid out to the customer they belong to.
The Three Levels Of Protection
Betting companies that are licensed to operate by the United Kingdom Gambling Commission must ensure that they offer their customers one of three levels of protection when it comes to their money.
The betting site that you sign up with has to make it clear which of the levels of protection they offer and it may surprise some customers to learn that even some of the biggest online betting firms choose the lowest possible level of protection. Whilst this might be a show of confidence in themselves, it does mean that you won’t be protected if the unthinkable happens.
You can find the level of protection by looking at the T&C’s of any licensed brand. If you search for the word “protection” you can usually find it.
Here’s a look at the three levels of protection:
No Protection (High Risk)
This one is fairly obvious. There is zero protection in place around your betting account. This doesn’t mean that a nefarious character could wander in and steal it, but it does mean that if the company goes bust then your money will not be kept separate from the rest of the money under the firm’s name, leaving it open to creditors etc.
All betting companies have to keep customer funds (deposits and bets that haven’t yet settled) in a separate account from their business accounts. I.e. they can’t start using your deposits to pay the cleaning staff in the office. What no protection means is the customer account is not independent of the business, so if it does go bust it is counted as part of the assets and distributed to all creditors. This means customers could get a fraction of what they are owed back, if anything at all, should the company fail.
Medium Protection (Moderate Risk)
In this instance, arrangements have been put in place to protect your money in instances where the company goes bust.
They can do this in different ways, such as by having insurance in place against going out of business. The important thing to realise here is that the arrangements that are in place are not guaranteed to see your money returned to you but you have a better chance than with no protection.
High Protection (Low Risk)
You would be forgiven for thinking that all of the biggest gambling firms offer high levels of protection, but this definitely isn’t the case. High protection means that the company has put your money into a separate account from the rest of the funds that it operates with and this account is legally recognised as being separate from the company.
An independent trustee is responsible for the money and it is checked by an external auditor. In this instance, you have the best chance possible of getting your money back as that account won’t be included in the assets if a company fails.
Why Isn’t There Automatic Protection In Place?
The most obvious question that you might wish to ask yourself is why, exactly, more isn’t done to put protection in place on the funds that are in betting accounts. The answer, simply put, comes down to the amount of money that it would cost companies to protect all of your money.
Having independent trustees and external auditors isn’t easy or cheap, which is something that the Gambling Commission has to take into account when it asks companies to obey certain parts of their licensing agreement, given that some companies would go bust if asked to do it.
Instead, the UKGC opts for something of an abdication of responsibility. Instead of telling gambling firms that they must protect your money, they instead inform them that they must tell you what level of protection, if any, they have put in place. Some companies will opt to put the highest level of protection in place as way of persuaded punters to use their services, whilst others will choose to put no protection there and trust their reputation, along with what they offer, will be enough to persuade you to place bets with them.
What You Can Do About It
The good news is that you, the punter, have a few options open to you in terms of what you can do about your money being unprotected. For starters, you can opt to only place bets with companies that offer the highest level of protection on your funds. This might not be ideal if you’d rather sign up with a company that offers better odds, say, or more services than the most protected sites, but it is the best way of ensuring that you get at least some protection from disaster striking and your betting site of choice going bust.
The other thing that you can do is to ensure that you don’t have too much money left in your account at any one time. Though some sites will charge you to make constant withdrawals, it is the only way of protecting yourself from losing the money if the site in question goes bust at any point. Also if you leave your money for over a year and forget about it companies can start charging fees on these as dormant accounts.
Aside from anything else, you’re much better off earning interest on your winnings or bankroll than allowing the betting site that you use to do the same thing. Keep your money ring fenced in a separate account wherever possible.
Of course, the reality is that this isn’t all that different to money being on credit in an online store. If it goes bust, you’re unlikely to be protected and see any sign of the money at any point in the future. Instead, you’ll just have to accept that you shouldn’t have left the money there in the first place. The answer, then, is to only leave as much money in your betting account as you’re willing to lose and not be too disappointed.