When most of us visit and join an online sportsbook or casino, we never really consider where our money is stored when it is deposited. Its just common to register, deposit via the cashier and then use the funds for betting. That is, after all, the basics behind sports betting and playing casino games, in general.
It isn’t common to wonder where the money is transferred to and what would happen to that money if the sportsbook company went bust. This does happen occasionally, so it’s vital that you know how your money is stored to keep it safe. Plus, in the event of the company declaring bankruptcy, you need to know that you’re able to get your funds back.
This is where the Deposit Protection Scheme (DPS) comes into effect. This operates as a level of protection for you, that certain bookmakers will enact. It guarantees that your money is safe, being kept separate from any business funds and it cannot be touched by the bookmaker if they do go bust. Not all sportsbook companies are a part of this, though. Which is why you need to know about the companies that are part of the DPS.
It is important to note that betting companies are not financial institutions and so money is not protected in the same way as with banks. It is good practice to not keep large amounts in a gambling wallet for this reason. Even for sites that have protection in place should they go into administration it could take quite a while to get your funds back if that happened.
A Look at the Official Gambling Commission Rules
The United Kingdom Gambling Commission (UKGC) is the regulatory body behind the gambling industry in the UK. It is this organisation that is responsible for licensing companies to provide gambling services in the country. As a result, all rules decided upon by the Commission must be complied with by licensees.
It is important to note that any funds deposited into a gambling business aren’t protected like those that you deposit into a bank account are. Bookmakers only need to provide information letting their customers know what will happen should they go bankrupt and out of business. That’s why you should look at each individual bookmaker’s regulations on this potential circumstance.
Three levels of protection exist where your funds are concerned, which are outlined by the Gambling Commission. A company offering services to UK customers need to decide upon which level they are incorporating into their business. Each one offers a different level of protection for you and your money.
The Protection Levels Available
When you’re determining the sportsbook you would like to sign up to, you should find out about the level of protection in place. To achieve higher levels of protection, a site needs to meet certain criteria.
The Commission enacts random checks on companies to determine if they meet that criteria. Irrespective of the level opted for by the bookmaker, the money of clients needs to be kept in a separate account to the funds of the company. The protection provided to that money will then help the Commission decide upon the level of protection in place.
Those UKGC ratings are:
- No Protection – Money is kept in a separate account. However, if the bookmaker goes bust, the player cash will be seen as part of the business and can be claimed by creditors.
- Medium Protection – Money is kept in a separate account but is protected by insurance. In the event of a bookmaker going bust, customers may have to claim their money back from a third-party instead of having it paid directly to them.
- High Protection – Money is held in a separate account that is ring-fenced and legally separated from the rest of the business. If the company goes busy, your money is paid back to you directly via an independent auditor or person.
It is, of course, vital that there is a good level of protection in place at the sportsbook you join and deposit at. If you have a high sum of money in your betting account that you keep for several sessions, you will want to seek out a site with the highest possible protection.
For anyone who deposits and uses the money all in one go, the protection level won’t be of as much necessity, because funds won’t be left in the betting account for another time.
What Happens with Your Deposited Funds?
The money that you deposit into your account will be stored and protected in different ways depending upon the level of protection in place. It also depends upon what happens with the bookmaker in question.
Should an alternative company come along and buy them out if they’re failing, then the most likely outcome is that the new company will need to agree to take on the customers and the debt that is in place. In this case, you usually find that your money moves across to the new company, and you continue betting with them as normal. Funds will most likely be added to an account with the new bookmaker.
If you’re betting with a company that has the lowest level of deposit protection, then your money is more likely to disappear to pay creditors off. Unless you’re able to withdraw it before any of the business accounts are frozen, you can say goodbye to those funds, or the majority of them, in your betting account. Often, a warning will come your way before a company goes bust, though.
What may seem strange to you is that there is a significant number of betting brands that only utilise the lowest level of deposit protection. Big-name brands often opt for the No Protection option. They are clearly happy with how their position in the market looks, but you may want to bear it in mind before signing up for an online account with one.