Casino Insolvency: Situations and Solutions
On relatively rare occasions, the online casino you’re playing at might become insolvent, or “it can go bust” as they say. In such cases, you should be prepared for what comes, know your rights, and learn how to prevent from entering a risky online casino—this why we have compiled these sources and gave you insight on what’s essential.
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 with 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 view on the matter.
UKGC regulations of online business closure
All UK-licensed casinos have an obligation to keep your player funds in a separate account from their earnings and profits. This is a specially imposed rule so that the client’s funds are protected in case of extreme measures.
Note, however, that even in the official Commission statements, they mention your casino funds’ volatility. They are described as not having the same legal safety net as your bank funds, for instance.
As per the current framework imposed universally by the Commission on UK casinos, there are three accepted fund protection levels. Any casino must choose one and apply it all the way through, to attain and maintain their license.
Interesting fact: 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.
Only choose sites with the UKGC approval
So far, the UKGC license is the hardest to receive and maintain, even by comparison with other licensing authorities. As we have seen, they have three protection levels when it comes to your player account funds, and any casino has to adhere to one.
Casino lesson: Sometimes, the level picked by the business, out of the three, can be written in the terms and conditions.
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.
In our casino reviews, we highlight the positive and negative highlights for every casino we analyse; even so, we highly encourage you to 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 money 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, you can make another deposit.
Lean on other’s experiences
In your quest for a suitable casino of your choice, you might want to try and figure out what other punters have faced when playing on one of your casino choices. We also highly encourage you to take the discussions to our comment section, at the bottom of every casino review.
Casino lesson: 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 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 when it comes to your funds. Mainly, 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 when it comes to the situations related to permanent casino closure. Please note that these statements are only valid if the casino is set on the medium or high standard.
What happens to pending active bets?
Usually, deposits should be paid back in full, in one big payment or smaller instalments, no matter the circumstance.
Casino lesson: Make sure to read what happens to a cancelled bet before making big wagers. It is also entirely 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 anywhere between a few minutes and a few days to be completed. 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.
Casino lesson: The fastest withdrawals are performed through e-wallets and crypto-currencies, as the process extends just to a few minutes.
What happens to bets you just won?
It all depends when you see the winning screen in front of you. If you won prior to the casino announcing its closure, then you can be sure to recuperate your money. Usually, the announcement comes before the actual business being 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
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 the following list applies, we recommend you cash out big sums of money, 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 given by casinos when they refuse to pay you your winnings. They mostly 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 problems to come.
- 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 not always a conclusive sign, if you see less and less marketing opportunities sent to you, that is weird. It could signal a change in marketing strategies, but it also may mean that the financials are at risk.
UK Casino insolvency in numbers
If casino busts are quite 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 the UK gamblers, the rise goes up to 150%.
The Insolvency Service has also called action upon illegal speculators, like the man that ran an illegal 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 your 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.
You remaining assets will be evaluated, and certain restrictions will apply. After your debt has been paid off, you will be able to regain access to remaining assets, and eventually cancel your bankrupt status.
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, giving others financial advice.
On occasion, some other things are inaccessible. They include having jobs that require a position of power, like counsellors or 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 key 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, then you will be able to avoid the worst-case scenarios. We always encourage UK punters to keep a balanced view upon 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 have to stop your offline and online gambling immediately. 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 as an offence.
- 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 reached out to a helpline for gambling addiction.
Main reasons why an online casino goes bust
Now we gave 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, as well as particular situations that we have seen over our 5-year experience.
The casino had an inefficient management
Good leadership for an online casino needs to meet a series of skills and attitudes. If these are missing, then the demise if imminent. We believe that each online casino team has to incorporate the following aspects into its way of conduction a business:
- An open-minded vision;
- Smart financial planning, generally inclined to safety;
- Good interpersonal skills;
- Ease in adapting to fast-paced changes of 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 inside of the online casino, the lack of these efforts may bring the casino to its insolvency.
Of course, there has to be a profitable plan for the business, 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 a smart 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 need to invest in marketing specialists and give 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 needs to find a niche that has yet to be explored.
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 with problems in this area.
Casino lesson: 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 you 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.
Casino lesson: 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 of:
- 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 what they 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 be 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 when a court of law has assessed the state of deep financial trouble and order how the debts will be handled by the person/business and by related authorities.
Casino lesson: 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 bound.
As a general rule, an insolvent online casino will have its UK license removed right away, so that is a clear sign that customers should stop using that product.
Final remarks on casino insolvency
We have walked you through all the major 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 for other topics!
- How gambling businesses protect your money – The United Kingdom Gambling Commission
- Insolvency Service Clamps Down on Bankrupt Gamblers and Speculators – Moore
- Bankruptcy restrictions orders – Citizens Advice
- 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