FSA Rules and Bookies
Interesting email from Extrabet:
We are writing to inform you that we have recently reviewed our Customer Agreement for two reasons.
Firstly, to remove all references to financials as this product is no longer offered by Extrabet. This change has no direct impact on your sports betting.
Secondly, the FSA has changed the rules about how we are allowed to hold money belonging to retail clients. Under the new rules we are required to hold retail clients’ margin money in a segregated client bank account. As a result, from 1 January 2011, we will hold your money in a segregated bank account, giving you greater protection in the unlikely case of our insolvency. We have amended the “Client money” section in the Customer Agreement accordingly.
The new Customer Agreement comes into effect on 1st Jan 2011, and you can view it here.
This agreement will govern all bets and money on your account from this date.
Please note we are not using the new Customer Agreement to make changes to our charges or other remuneration.
In continuing to bet on your account you are deemed to have accepted the terms of the new Customer Agreement.
they sat they no longer offer financials yet refer to holding 'margin money' ... ?
I thought that to, Freatham. Shame it was not in force when BF pulled their stunt. There would be no argument about which jurisdiction the money was in.
Isn't it just to do with the fact they offer spread betting (which is classed as a financial instrument and so comes under the remit of the FSA) that they have to have that ringfencing for client funds? I don't know to be honest but imagine that's what it is, probably doesn't matter what the 'target' of the spreads is (ie sports and not financial markets), just the fact they're offering spreads to UK customers means they have to have FSA approval.
Originally Posted by chachi
The thing is that kind of ringfencing isn't required by fixed odds sports betting sites, even if they do operate in the UK - Betfair included since they don't offer spread betting or any other financial 'instrument' that requires FSA regulation afaik? Their sister company Tradefair is definitely regulated by the FSA though since they do offer spreads/CFDs. It probably would have been a lot harder for them to get away with removing funds from customers accounts in the same way that Betfair did without there being some kind of comeback available to customers via the FOS.
Originally Posted by LosEndos
I think some Australian territories do require onshore gaming sites to ringfence funds though don't they regardless of whether they're offering fixed odds or spreads/financial instruments?
As munk said the only reason the FSA have any involvement with Extrabet at all is that they offer spreads and as such need to be FSA regulated.
Your common or garden book has no such obligations.
All Aussie books have an obligation to ring fence client deposits I believe - hence making them the safest places for your cash in the bookmaking world.
I think Italian sportsbooks do as well so are suprisingly the second safest. Certainly BetShop did.
Originally Posted by dreamylittledream
Have a plan and stick to it
Originally Posted by dreamylittledream
so if you deposit £300 it is ringfenced
then you bet £200 and lose it -> your ringfenced balance is now £100
then you bet your last £100 @ 6.0 and win £500 -> your ringfenced balance is £100 and the remaining £500 is not protected?
in theory, you can't lose (without betting) as your deposit is safe, but your winnings are not guaranteed (nothing gained nothing lost if you are pure bettor, but horrible situation for those who layed their bets or dutched with another bookie)
am I missing something?
Whatever your balance total is, that amount is ringfenced so in your example the £600 would be protected.
Originally Posted by cleaner