How Withdrawals Are Changing in the iGaming Space

Posted by Harry Kane on Sunday, January 27, 2019

If you’re familiar with the UKGC’s core strategic objectives through 2021, you’ll know that the regulator is determined to improve both the safeguards for vulnerable players and the reputation of the industry as a whole.

This has seen a number of high profile operators sanctioned over the course of the last 18 months, with brands such as William Hill and 888.com receiving fines for failing to protect problem gamblers and implementing inadequate anti-money laundering measures.

Another key area of focus has been the wagering and withdrawal requirements imposed by some operators, many of which have resulted in an investigation and subsequent enforcement action by the Competition and Markets Authority (CMA) in conjunction with the UKGC. We’ll explore this further below, while asking how withdrawals are likely to change in the iGaming space going forward.

How Casumo has Introduced Locked Withdrawals

The focus on withdrawals is certainly interesting, with the investigation from the CMA highlighting a number of questionable restrictions placed on customer accounts and accrued income.

This led to an official enforcement action and the issue of written warnings to several online gambling operators, while the UKGC welcomed these findings and pledged to maintain transparency within the marketplace.

Of particular concern were the daily, weekly and monthly limits placed on fund withdrawals by some operators, many of which were considered to be unreasonably low. The CMA also highlighted the unnecessary and arbitrarily short deadlines on the time that customers had to verify their identity in some instances, with this often included as a key condition of being able to withdraw funds.

This led on to a further concern, which revolved around so-called ‘dormancy’ terms that effectively enabled firms to confiscate funds after a predetermined period of inactivity. Once again, such time periods were deemed to be noticeably short, while the precise terms were often not advertised clearly to customers.

Of course, the UKGC had already cited the wagering requirements set by some operators as creating a potential transparency issue, with some brands forcing players to bet their winnings up to 50 times before they can complete a withdrawal.

Once again, these complex and restrictive wagering terms were often not articulated clearly to new registrants, many of whom had been enticed by a seemingly lucrative bonus offer without understanding precisely how it would work.

The key issue here is that players could be forced into a situation where they had to gamble frequently just to withdraw their winnings, while operators failed to do everything in their power to outline the exact terms of a specific promotion or wager.

While the machinations and interventions of the CMA and the UKGC may have compelled some operators to change their approach to withdrawals, however, others have been proactive by identifying other potential issues and amending the process accordingly.

Take Casumo, for example, who recognised that the traditional process of completing a withdrawal could take up to five days following an initial request. During this time, there was ample opportunity for gamblers to cancel this request, with some operators hoping that players would change their minds and gamble their winnings instead.

To negate this, however, Casumo have innovated and begun to offer the chance for its customers to lock their withdrawals. In simple terms, players will see a lock symbol appear on their screen after they’ve requested a withdrawal from their account, and clicking this icon effectively confirms the transaction and makes it irreversible.

So, even if you change your mind during the subsequent days and prior to the competition of the withdrawal, you cannot reverse it manually while the brand’s customer support agents are also unable to stop the payment from being processed.

While there’s no doubt that Casumo are blazing a trail in this respect, they’re certainly not the only operator to consider introducing locked withdrawals.

In fact, we should probably expect this to become a prominent feature over the coming months, as casino brands look to become more proactive in their attempts to safeguard customers and avoid the wrath of the UK regulator.

What Next for Withdrawals? Enter Bitcoin and Blockchain Technology

Of course, it’s fair to surmise that the typical withdrawal process has already been revolutionised by the emergence of blockchain and Bitcoin casinos, which naturally negate many of the issues previously raised by the CMA and the UKGC.

Firstly, there’s no third party involved when withdrawing funds from a Bitcoin casino to a cryptocurrency wallet, minimising delays and the cost of transferring money in the process.

Not only this, but there are no punitive limits associated with withdrawals completed using Blockchain technology, as the process is not managed by a central authority and cannot be manipulated by individual operators.

Even more importantly, a number of Bitcoin casinos and iGaming innovators such as TruePlay have developed systems that do away with extended withdrawal periods, by allowing funds to be transferred almost immediately after the request has been processed.

This is thanks to the blockchain technology that underpins Bitcoin casinos and cryptocurrency, which incorporates smart contracts into its online transactions in order to offer speed, anonymity and flexibility to users. This is tailormade for the online casino industry, in which even the market leading operators are struggling to optimise their customer’s experience while also adhering to a constantly changing regulatory framework.

This means that Bitcoin-friendly casinos are sure to become more widespread in the future, while a further raft of blockchain-inspired tools will also be deployed to improve the withdrawals process going forward.

There’s even talk of combining various gambling projects and cryptocurrencies in a unified, blockchain-based ecosystem, complete with a deposit and withdrawal mechanism that functions across multiple casino outlets.

Once authorised by individual players, this would create an all-in-one solution that allows for instantaneous withdrawals, with funds shifting seamlessly between a verified crypto wallet and various casino accounts.

So while it will undoubtedly be a case of evolution rather than revolution for withdrawals in the iGaming market going forward, Blockchain will ultimately provide a long-term solution for operators in the UK.