Partypoker has upgraded its declaration on how it says it protects customer deposits, stating that it has taken steps to protect these funds in the unlikely event that the company goes bust.
The self-declaration is a necessary part of licensing in the United Kingdom. Previously, partypoker had declared only a “basic” level, which effectively offers no protection in the event of insolvency.
The decision comes following the publication of an in-depth report conducted by pokerfuse which surveyed 25 licensed online gambling providers in the UK and tabulated how they self-declare funds. The report revealed that of the 25, almost half had just the “basic” protection level. Along with partypoker and its sibling bwin.com, other’s declared as “basic” include global brands 32Red, Betsson, Betsafe, William Hill and partypoker.
On Wednesday, partypoker upgraded from the “basic” level—which, while player deposits are kept segregated from operating funds, would mean that they would be recognized as business assets if the company were ever liquidation—to the “medium” level.
“I can confirm that player funds are held in segregated bank accounts and that we meet the criteria of 'medium protection’ under UKGC guidelines,” stated partypoker spokesperson Colette Stewart, posting the update on a public player forum. “This means that if the company becomes insolvent, player funds are safe and will be returned to players.”
In partypoker’s new disclosure, it states that UK customer funds “are kept in bank accounts separate from other business bank accounts and protected by a Segregated Client Account Trust.“ According to the operator, UK customer deposits total approximately €6.7 million ($7.7 million USD, or £5.4 million GBP).
Pokerfuse has updated its report to reflect the change in declaration on partypoker.com. It is expected that bwin.com will also soon upgrade its declaration. This brings it inline with the likes of 888poker, Ladbrokes, RedKings and Sky Poker.
The move by partypoker is expected to be welcomed by players. It has been shown repeatedly in the past that “basic” protection does in fact put player deposits in jeopardy. While rare, there have been cases—including Everleaf, 5050 Poker and Purple Lounge—where customer funds were lost due to insolvency. In the case of the latter, the subsidiary was owned by a publicly-listed company, but that still afforded no protection when it came to the company liquidating. In other cases, like the failure of PKR, another operator had to bail them out so customers were not left out of pocket.
A medium level, therefore, is an important reassurance: It shows that steps have been taken to protect their funds even in this unlikely event. UKGC defines “medium” as arrangements have been made, such as insurance, “to make sure that the money in separate accounts is given to customers if the company goes bust.”
However, as pokerfuse’s report details, five operators go one step further to declare “high” levels of protection: PokerStars, its sister site Full Tilt Poker, Betfair, Coral Poker and Paddy Power. The difference between medium and high is nuanced, but according to the UKGC’s definition of the medium level, “there is no absolute guarantee that all funds will be repaid,” whereas for the high level steps have been taken “to ensure” that funds are always repaid to customers in the event of insolvency.
While operators have been declaring how they protect player funds since 2014, the issue returned to the spotlight this month when a partypoker representative mistakenly stated that player funds were not segregated at all. The error was quickly corrected (it is a requirement of UK regulations to segregate funds), but it again cast light onto the topic of what would happen in the unlikely event that an operator becomes insolvent.
The conversation was picked up by the DAT Poker Podcast, a popular podcast featuring PokerStars ambassador Daniel Negreanu as a co-host, which ultimately led to the publication of pokerfuse’s UK Player Fund Protection Guide. This was subsequently discussed in another podcast (audio player embedded below, discussion starts at the 23 minute mark).
As pokerfuse has cautioned before, an operator’s statement on fund protection is a self-declaration that may not have been verified by the regulator, so there is still a level of trust with the online poker room, casino site or sportsbook on which you choose to deposit. Furthermore, if you are not in the UK, then your play likely falls under another regulatory body, and therefore may have different rules—the declaration may not apply to you. For more details, read the pokerfuse guide, and if you have further questions, it is suggested that you contact customer support of your site.