Casino Insolvency: How It Happens & What To Do
Rarely, the online casino you play at goes insolvent. In such instances, you should know your rights. We compiled resources, so you know the essentials.
- What happens if the casino goes bust?
- Our pro-advice in case of insolvency
- Main reasons why an online casino goes bust
- Insolvency explained
- Final remarks on casino insolvency
What happens if the casino goes bust?
The main reason why online casinos stop operating is that they have become insolvent. However, there are ways around that extreme situation.
For instance, a website may try to:
- Sell its domain and activity to a bigger company
- Merge with a bigger competitor
Even so, if the ending is inevitable, the casino should always announce the closure of its online business weeks, if not months, in advance.
This gives you time to complete what’s left of your wagering and eventually withdraw your funds without any strings attached.
Let us go over the United Kingdom Gambling Commission’s view.
UKGC regulations of online business closure
All UK-licensed casinos must keep their players’ funds separate from their earnings and profits. This is a specially imposed rule so that the client’s funds are protected in case of extreme measures.
Remember that even the official Commission statements mention your casino funds’ volatility. For instance, they are described as not having the same legal safety net as your bank funds.
As per the current framework imposed universally by the Commission on UK casinos, three accepted fund protection levels exist.
Any casino must choose one and apply it all through to attain and maintain its license.
The UKGC applies random checks to the casinos it has licensed to see if they accurately apply the guidelines we have summarised above.
KingCasinoBonus protection guide for your funds
Take into account the pro-player advice that we have resumed here.
It will help you in the case of your casino going bust and generally in any online casino circumstance.
Make sure to only choose sites with UKGC approval.
So far, the UKGC license is the hardest to receive and maintain, compared with other licensing authorities. As we have seen, UKGC uses three protection levels for your player account funds, and any casino has to adhere to one.
As we always say, the site’s terms and conditions are vital for your casino experience. Before signing up, and of course, before depositing, you need to read them and, most importantly, understand them thoroughly.
Our casino reviews highlight the positives and negatives for every casino we analyse; even so, we highly encourage you to thoroughly read them by yourself.
Tame your deposits
Even without the horizon of insolvency, you need to be very careful when it comes to your spending.
To avoid losing big sums of funds if the casino closes its virtual doors and has a low level of fund protection, make smaller payments, wager through them, and cash out. Only then can you make another deposit.
Lean on other’s experiences
In your quest for a suitable casino of choice, try and figure out what other punters have faced when playing on one of your casino choices.
You need to learn to discern between useful information and complaints about casino losses, which, to a certain degree, are unavoidable.
Our pro-advice in case of insolvency
It would be fitting if you were prepared for any online casino scenario that may arise.
That is why we have crafted this section so you can gain access to the following topics:
- How online casino companies have to protect your deposited cash
- What happens after the official site collapse
- Learn the signs of a struggling casino that might go bust soon
- How to handle gambling debts that push towards individual insolvency
Protection of your casino funds
As stated at the beginning of our post, the best protection you can get when you make payments towards an online casino is when the business keeps the player’s funds separated from other monetary dealings.
On the same line of thinking as the UKGC, we recommend you look for casinos with this high standard regarding your funds.
An external financial institution and an external auditor taking care of your funds means more chances to get your money back quickly in case something goes wrong.
FAQ: the casino is closing
We thought of walking you through a series of questions and answers regarding the situations related to permanent casino closure.
Please note that these statements are only valid if the casino is set to a medium or high standard.
What happens to pending active bets?
Usually, funds that have been wagered in a bet that has not come to an end are still considered deposits.
Usually, deposits should be paid back in full, in one big payment or smaller instalments, no matter the circumstance.
Make sure to read what happens to a cancelled bet before making big wagers. It is also possible that bets within an active bonus have a special status and behave differently than casual real-money bets.
What happens to pending withdrawals?
As the industry standard shows, withdrawals from a casino account can take between a few seconds and a few days to complete.
The main reasons for this disparaged wait are related to the extra verifications they entail, the casino policy, and the banking service policies.
If a casino goes bust, all your pending cash-out requests should be respected and paid back to you. Nonetheless, that might take more time than expected previously.
The fastest withdrawals are performed through e-wallets and crypto-currencies, as the process extends just to a few minutes. Hence, playing in casinos with PayPal payments could be a wise choice in the long run.
What happens to bets you just won?
It all depends on when you see the winning screen in front of you.
If you won before the casino announced its closure, then you can be sure to recuperate your funds. Usually, the announcement comes before the actual business is closed.
Nonetheless, bonuses that still have wagering requirements active are subject to different scenarios, depending on what was stated in the bonus policies or the general terms and conditions.
You can also confront cases where the bets are voided immediately after the online casino faces financial issues. But, even so, you need to be notified via a message in your player account or an email/SMS announcement.
How to recognise that an online casino is at risk
- Your requested withdrawals are prolonged
- Your requested withdrawals are refused for odd reasons
- Your communication with the casino is slow and inefficient
- General bizarre behaviour
As we keep reinforcing, prevention is the best solution. Therefore, we believe it is efficient for you to recognise the signs of a struggling online business. If you see that more than one tip of our list applies, we recommend you cash out big sums of funds and keep playing with small amounts at a time.
Your requested withdrawals are prolonged
Suppose you observe consistency when it comes to your payments being slowed down. In that case, that might signal that the casino has insufficient funds.
To calculate a legit situation, add the casino’s average processing time, the banking service, and the KYC time.
Your requested withdrawals are refused for odd reasons
There are only a handful of valid reasons casinos give when they refuse to pay you your earnings.
They mainly relate to extra paper verifications.
Your communication with the casino is slow and inefficient
If you see that the casino support team is not helpful and takes a long time to take care of your queries, that may be a sign of future problems.
General bizarre behaviour
Suppose the casino’s attitude changes suddenly for the worse, much differently than before. In that case, that can be a sign that problems are on the rise.
Even though this is only sometimes a conclusive sign, if you see fewer marketing opportunities sent to you, that is unusual.
It could signal a change in marketing strategies, but it also may mean the financials are at risk.
UK Casino insolvency in numbers
If casino busts are rare, the individual numbers of gamblers who have entered insolvency have been exponentially rising for the last three years.
According to the Moore report on UK gamblers, the rise goes up to 150%.
The Insolvency Service has also called action upon illegal speculators, like the man that ran an unlawful betting scheme of over £8,5 million.
Bankruptcy restriction orders for gambling debts
Brits can declare bankruptcy individually through the help of a governmental guide. This is when your gambling-related debts and usual bills become too large for your financial possibilities.
Each case is settled separately by an adjudicator, and it will result in a restructuring of your debt that is affordable to you.
Your remaining assets will be evaluated, and certain restrictions will apply. After your debt has been paid off, you can regain access to the remaining assets and eventually cancel your bankruptcy.
Individual gamblers can solve their bankruptcy issues by following the court orders of a BRO, which can take up to a decade. The usual limitations relate to bank credit approvals, carrying out business moves that promote themselves heavily, and giving others financial advice.
On occasion, some other things are inaccessible. They include jobs requiring a position of power, like counsellors, governors, or any public role in local or national governments.
Of course, this excludes being an MP in The House of Lords or The House of Commons.
What to do to avoid the consequences of individual gambling insolvency?
Gambling addiction is the main reason for uncontrollable debts, which, as we saw, sustains gambling insolvency. To solve the issue, we have your back on it.
Prevention is always the critical solution. For such situations, we have a page that teaches you how to recognise gambling addiction signs.
After you have walked through our steps, you can use the resources we have grouped there.
If you can keep your gambling in check, you will be able to avoid the worst-case scenarios. We always encourage UK punters to keep a balanced view of luck-based gambling.
You always need to stay informed throughout your casino experience. KingCasinoBonus is your aid in this sector as well, through our gambler’s rights and obligations guidebook.
If you declare bankruptcy, you must immediately stop offline and online gambling.
This will help you get your funds back on track and give you a plus in your next steps, legally and mentally. Bankruptcy restrictions are legally bound, so breaking them is deemed an offence.
Casino lessons in regard to gambling addiction prevention:
- Do not try to solve casino debts by engaging in banking debts through credits.
- Seek the advice of a particular financial counsellor only after you reach out to a helpline for gambling addiction.
There are numerous helplines available for UK punters, and several of them are available 24/7. Among the most popular ones, there are GamCare, BeGambleAware and Gordon Moody.
Several problem gamblers hesitate to seek help out of fear of society judging them. Additionally, several punters deny having a problem even to themselves, so seeking help may be more difficult in such cases.
That’s why top online casinos offer numerous responsible gambling tools which help players control their gambling behaviours.
Main reasons why an online casino goes bust
Now we have given all the information and sources you need if your casino goes bust, it is time to present the most often-seen reasons for that to happen.
Of course, our list is based on general market observations and particular situations we have seen over our 5-year experience.
The casino had inefficient management
Good online casino leadership must meet a series of skills and attitudes. If these are missing, then the demise is imminent.
We believe that each online casino team has to incorporate the following aspects into its way of conducting a business:
- An open-minded vision
- Smart financial planning, generally inclined to safety
- Good interpersonal skills
- Ease in adapting to fast-paced changes in the online world
- Genuine leadership
Like in any successful venture, the staff that present merits must be kept in the team, although you can’t see such details from the outside of a casino brand, the lack of such efforts may bring the casino to its insolvency.
Of course, there must be a good business plan, no matter how things evolve.
The casino’s marketing strategy is not effective
Online casinos depend exclusively on the ads that they send via the Internet. This is why the focus needs to be gathered on an intelligent marketing strategy.
The necessity of constant new players requires the advertisement to be sent smartly, with the presentation of attractive products constantly.
What are the solutions employed by successful casinos?
A well-prepared marketing team is the centre of the online casino’s image. They must invest in marketing specialists, giving them space for good ideas and projects.
They also have to be careful about trying to bring something new to the table. With so many online casinos on the rise, a business must find a niche yet to be explored.
Hiring a professional PR team could also help casino companies navigate numerous disputes and manage any inconsistencies in their communication process with their target audience. Hence, a well-trained PR team can work with the marketing team to ensure the business stays afloat.
The casino runs on a poor model
Again, not having a unique basis for the business is a dangerous lack, which might eventually get the casino to insolvency.
The focus should be more on the gaming lobby options, the promotional materials available, a nice design, and a helpful team for your customer support.
From our experience, the idea of organising competitions between players is also an enticing advantage that not all casinos have. The same level of importance is granted to the availability of crypto-currencies.
Safety was not ensured properly
Any part of our lives that happens strictly online comes with a dual nature: it is easy and efficient, but it can be the target of online predators and hackers.
Even though it is rare that hackers get to your account, as encryptions become more and more useful, not ensuring a safe place for your customers may bring about fines.
In their turn, these fines can bring a business down and eventually lead to it completely closing. When we write our casino reviews, we mention the most important details about the site’ and app’s security and if the casino has a history of problems in this area.
The small lock icon in front of the page URL means you can safely log in, make payments, and wager them.
Tough economic situations
Suppose most of the casino’s cash flow does not rely on the providers’ licensing and the clients’ payments. In that case, it can only mean that the business leans on investors. In times of economic turbulence, that may be much more volatile than one may think.
This, coupled with any other problem on the current list, may mean a negative impact and, in the end, a business shutting down.
Of course, all these data are not publicly available to the average punter, but we make concentrated efforts to uncover them through research.
Established brands, usually the ones listed on the London Stock Exchange, have plenty of means of resolving day-to-day issues. That brings an extra layer of safety to the games and bets you engage in while being on their platform.
The ending section of our post deals exclusively with the legal and economic definitions of these statuses. This is why you should stick around and read our defined topics:
- Insolvency as a general situation
- Insolvency defined and compared with bankruptcy
- Explaining the liquidation of a business
Key knowledge of insolvency
Insolvency starts when a company piles up more debts than it can actually pay up to creditors and bill companies.
This might also affect the paychecks of the employees that work there. As we have seen so far, it is a state of finances that applies to bodies and individuals.
Debts can be restructured and eventually paid off; however, that might not stop the cease of a business like an online casino.
What about bankruptcy?
This is the furthermost point of insolvency, and it is also the time when courts of law are involved.
This is when a court of law has assessed the state of deep financial trouble and ordered how the debts will be handled by the person/business and by related authorities.
A casino being insolvent may be a temporary issue. Bankruptcy is, however, definitive. The casino will no longer operate and permit new players and new wagers.
What about liquidation?
Liquidation is a legal state where the licenses are retracted.
In the case of UK casinos, the United Kingdom Gambling Commission has a guide for struggling businesses that want to cease their activities within the law’s legal bounds.
As a general rule, an insolvent online casino will have its UK license removed immediately, which clearly indicates that customers should stop using that product.
Final remarks on casino insolvency
We have walked you through all the significant topics of interest for you as an online casino user. We have shown you inside casino knowledge and data on:
- What to do when your casino is insolvent
- The UKGC regulations on the matter
- How can you deal with it on a personal level
- What happens to your funds when your chosen platform becomes insolvent
- Main reasons why a casino goes bust
We hope that we have been of service to you in your casino journey. Do not hesitate to browse our blog section for other topics!
- How gambling businesses protect your money – The United Kingdom Gambling Commission
- Insolvency Service Clamps Down on Bankrupt Gamblers and Speculators – Moore
- How To Handle Possible Bankruptcy Due To Gambling Debts – Jubilee
- What Is Insolvency? – Investopedia
- Bankruptcy and liquidation – The United Kingdom Gambling Commission
- Applying to become bankrupt – gov.uk