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Is Gambling Regulator LGA Worthless
Does this effectively render the regulator toothless....?
Generating plenty of heat on player message boards at present is the sad tale of a German player who is still struggling to be paid out on an online progressive jackpot, worth Euro 167 500, that he hit in August 2008.
Just one of several disturbing aspects of the affair is the manner in which Malta's regulator LGA is alleged to have handled the complaint. After a protracted wait on the regulator's decision, the player was dumbfounded to learn that the online casino in the dispute, GVC Holdings subsidiary Casino Club , could apparently set aside its obligation to pay due to a Malta law that gambling debts are unenforceable!
The surreal dichotomy of a state-sanctioned regulatory regime which is effectively rendered powerless to intervene due to that same state's own laws has boggled the minds of many players...and not in a good way.
After all, statistics made public by the Malta Minister of Finance earlier this year show that the island nation makes tens of millions of Euro annually from....licensing and supposedly regulating online gambling sites! The sheer irony is inescapable, and the loophole could leave the door open to questionable conduct.
The player claims that he has been an active gambler at Casino Club from 2003 until his account was shut down after his big win in the third quarter of 2008, and that his action and deposits have never been questioned or challenged by casino staff. Until the big win, that is.
He claims that his account was in good standing following a recent deposit of Euro 25 000, boosted by a casino-granted bonus of Euro 5 000. On his 20th spin on the Jackpot Poker progressive he hit the sort of jackpot gamblers dream of - Euro 167 500.
After first suggesting to him that more wins could be achieved if he played on with his windfall, casino staff then advised him two weeks later that his account had been locked for a security check, and he simultaneously discovered that his new-found wealth had been taken back by the operator.
Accusations that he had funded his lucky gamble on the progressive with money he had allegedly first earned illegally on Casino Club's blackjack offering were then made to justify disallowing the progressive win. Some time later the player lodged a complaint with the LGA.
The regulator asked for evidence from Casino Club, which the casino claims it supplied.
After a further delay whilst the regulator digested the material, the player was given the bad news that his issue was ‘resolved’ because the casino had exploited a legal loophole that gambling debts are unenforceable under Malta law. Apparently the regulator did not comment on the real merits or otherwise of the case.
German lawyers advised the player that he would have to contest the issue in the Malta courts, a process likely to take time and money, but which would presumably require the casino to prove its allegations and show why it had only decided that the player was undesirable when a large amount of money was involved.
The affair has been the subject of intense debate and speculation on gambling message boards ever since.
From the online casino's perspective, the incident is not quite as straight forward. It has claimed, so far without public substantiation, that the German player was deprived of his winnings because he was suspected of being involved in a two person 'gambling ring' and was guilty of unspecified fraud, using robot software, multi-accounting, collusion and bonus abuse...a formidable mix of accusations covering almost every serious offence an internet player can commit.
A Casino Club spokesman claimed that the player had been under security surveillance for some time to see what he was up to; that the casino was perfectly justified in taking the action that it had; that the LGA had been supplied with full details; and that the finding had been in favour of the casino.
A parallel debate regarding funds involved in the disallowed progressive had meantime developed, with players wanting to know why the disqualified win had not been put back in the progressive jackpot, as this was funded by a percentage of player bets and was consequently not company money.
After first assuring players that Casino Club was part of a financially sound group of integrity and that the funds were therefore safe, a casino spokesman last week made a commitment to return the disqualified funds to the jackpot, explaining that the money had been held pending a resolution of the complaint [the complaint was allegedly finalised early in 2010, according to the player - ed.]
With the heat rising on this long-running issue and an apparently ludicrous situation that suggests that Malta licensees can play the 'unenforceable gambling debt' card, Casino Club declined our invitation to comment after considering its position for several days.
However, a company spokesman became active on the Casinomeister message board, putting forward an offer to ask the LGA for a review and committing to returning the Euro 167 500 to the progressive jackpot.
Sceptics have been quick to point out that these circumstances now present the regulator with something of a dilemma, if it is shown that it has accepted the ‘unenforceable gambling debt’ loophole as a valid argument.
On the one hand, the LGA has been appointed to license and regulate the operations of Malta-registered operators, but it would seem to be constrained from effectively doing so by a legal loophole that enables those same operators to evade their obligations to pay out on a win. Hardly an endorsement for fair and safe online gambling.
Whether the player could seek justice in a Malta civil court on the grounds of a contractual relationship through the casino’s T&C’s is unclear. If the casino responded to such a challenge by presenting its accusations of foul play by the gambler, it would presumably have to detail and adduce proof of those allegations to the satisfaction of an independent judge.
The LGA has thus far remained aloof from the controversy.
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