Player Funds Protection in the UK: How Online Poker Operators Protect Your Money

Under rules set out by the Gambling Commission of Great Britain (UKGC), all internet gambling businesses must hold player deposits in a separate bank account, segregated from day-to-day business accounts. This applies to any real money online poker companies that operate in the UK.

However, this does not guarantee that your funds are safe. In the case that the company goes bust, these funds can be considered part of the business, and may be used to repay creditors. Players will be considered creditors along with other individuals and companies.

What the UKGC does require is that all operators declare to players how they protect funds and what would happen in such a scenario. There are three levels: basic, medium and high. Basic affords no real protection to players in the case of insolvency. Medium provides some protection, but no guarantees. High goes as far as possible in ensuring player deposits always go back to the players.

To help players make an informed decision about where to play, we have collected the declarations of what we believe to be all major online poker operators licensed in the UK. In total there are 26 operators on the list. Of these, 5 (19%) report a high protection scheme, 10 (38%) are listed as medium, and 11 (42%) are basic.

Update October 10, 2018: Partypoker upgraded from basic to medium.
Update February, 2019: Run it Once Poker added at medium.

Five Must-Knows Before Reading the List

1. All UK-licensed sites must segregate player deposits from business operating funds. This ensures that your money is not used for the day-to-day running of the business.
2. However, this offers no protection from insolvency. If the business goes bust, these segregated funds will be considered company assets and can be used to repay creditors.
3. Operators can optionally declare a “medium” or “high” level of player fund protection, which requires customer deposits to be held in a financial vehicle that provides a level of protection if a business goes bust.
4. However, this is a self-declaration and may not have been verified by the regulator, so there is always an element of trust with the operator.
5. Pokerfuse makes no guarantees as to the accuracy of this list and we recommend all players verify the information for themselves!

The List: 25 UK Operators Ranked by Their Self-Declared Player Funds Policy

Below is a list of all major licensed UK online poker operators, and their declared level of fund segregation for customer deposits. The list is ordered with the highest level first and then in alphabetical order by name of poker room.

Important disclaimer: This is for information purposes only. While every effort has been made to ensure this table is accurate at the time of writing, we cannot guarantee that there are no mistakes, nor that operators really do protect customer funds to the level declared. We will endeavor to update this list when made aware of changes, but this may become outdated as operators change their policy. If you are not in the UK, then this level of protection may not apply to you.

If you have any doubts, please contact customer support of your poker room, who is obliged under UK regulations to tell you how they protect your funds.

If we are missing a site, or you spot a mistake, please let us know.

Understanding What Each Level Means

The three-level system, set out in a 2016 regulatory document, is defined by the UKGC thus:

• Basic: No extra protection. Money in these accounts would still be seen as part of the business if it went bust.
• Medium: There are arrangements (eg insurance) to make sure that the money in separate accounts is given to customers if the company goes bust.
• High: Customers’ money is held in an account which is legally and in practice separate from the rest of the company. This account is controlled by an independent person or external auditor.

Operators are required under the terms of their license to present this information to the customer before they make a deposit and players must agree to deposit under these terms (In reality, this means the information is usually tucked away in the terms and conditions, and most players will have blindly checked the “agree” checkbox rather than wade through the legalese).

There is a big difference between basic and medium. The former means that there is no protection from insolvency. Medium means that “steps have been taken to protect customer funds.”

The difference between medium and high is more nuanced: Under the UKGC’s recommended text for declaring the former, it says that “there is no absolute guarantee that all funds will be repaid.” For the latter, it reads “this means that steps have been taken to ensure that customer funds are repaid to customers in the event of insolvency.”

Basic means “No Protection”

The UKGC says it itself—in a March 2018 review of gambling regulations, the UKGC has proposed that the term “Basic” protection be renamed to “no protection” to make it clearer to consumers that their funds will be at risk if an operator goes bust.

This is not just theoretical—it has been put to the test multiple times. Most recently, online poker operator PKR went into administration, a process similar to declaring bankruptcy in the United States. PKR held funds under “basic protection” (aka no protection). Administrators looked to liquidate assets “to maximise realisations for the benefit of all creditors.” Many of the 35,000 PKR players would be among those creditors.

Thankfully, PokerStars stepped in to come to an agreement with the administrators to purchase the customer database and refund all players to the tune of approximately $2 million. If they had not, players would have faced years of wait and would have likely received pennies on the dollar for their money, if anything at all.

“High” level and Independent Trusts: The Gold Standard

In the UK, the “high” grade is equivalent to the concept of an independent trust, requiring money held in an account to be “legally and in practice separate” from the business accounts, controlled by an independent third party. In the event of insolvency, this money will not be considered part of company assets, and there is an independent trustee tasked with returning funds to depositors.

The “medium” level is equivalent to a “Quistclose” trust, an arcane financial instrument defined in UK law where arrangements are made to ensure customer account assets are distributed if a company is insolvent. However, it offers no guarantees.

Many might feel that the UKGC should require all licenses to achieve the top rating, rather than give them the option and just inform customers (deep in the terms and conditions) how they manage customer deposits. Indeed, pokerfuse has written at length in the past, predating the UK regulations, that segregated funds offer no real protection to consumers in the event of insolvency. Full Tilt, Everleaf, Purple Lounge, 5050 Poker, PKR—there have been a litany of failures where the regulator required funds segregation but that did little to help players when the business went bust.

Arguably, regulators do not go far enough to protect players in this scenario. French regulator ARJEL, which approved the license of Full Tilt at a time when it was already in deep financial trouble, was prompted to change its policy and require funds to be stored in trusts. In the United States, Nevada set the bar for player fund protection, enshrining in the regulations that money is held in independent trusts. New Jersey could do more.

However, it is worth noting that while there have been multiple examples of how “basic” funds protection affords no real defense in cases of insolvency, the other end of the spectrum has not been tested: That is, there has been no case yet of an online gambling operator with a declared “high” level of protection going bust and players getting their money back. Until that time, there is still a level of trust that this protection scheme works in practice. And, it is worth repeating that this is a self-declared measure that “may” have been checked by the regulator. It also may not have been checked.

Consultation on Tightening UK Rules

The UKGC is exploring whether these rules should be tightened. The current strategy “seeks to establish a market in which consumers are able to differentiate between operators on factors other than price alone,” but the regulator admitted in its March 2018 review that the current system has had “limited apparent impact on consumer behavior.”

This is perhaps unsurprising given that the funds protection message is generally buried in the terms and conditions. It is likely that very few consumers are even aware of the issue and have no clue to what level their poker room protects their funds. The regulator will endeavor to “undertake further work into the various motivations underpinning consumer behaviour before deciding whether to propose any change.”

In its action plan, it recommends renaming the “basic” to “no protection” and will “consider how to better inform consumers about the risks.” They will also “consult on mandatory protection of customer funds but ensuring we gain sufficient views from consumers as any additional protection is likely to see costs imposed on consumers in the form of lower odds or fewer bonuses.”

This document aims to help consumers understand this topic and make informed decisions about where to play, and to encourage operators who are graded as “no protection” to consider the business benefits of a “medium” or “high” grade.

How to Choose

The decision on which online poker room to play on is a personal choice, and we hope that how an operator secures your funds is factored into that decision.

You may feel that depositing money with a big company secures you from the scenario of insolvency, and there may be some truth to this: Large international operators are probably less likely to go bust than small independent rooms. Publicly listed companies with open financial accounts have a higher level of transparency than private companies.

However, it may be sobering to read about the case of Purple Lounge which shut down in 2012, taking with it all player deposits. The poker room was a subsidiary of Media Corp, a company listed on the London Stock Exchange. Purple Lounge was liquidated independently of the parent company, and no money was returned to players (Media Corp ultimately folded 16 months later).

What To Do if You’re Not in the UK, or Your Online Poker Room is Not Listed

The declarations here only apply to activity taking place under UKGC license. If you are outside of the UK, it is likely that your play falls under the purview of another regulator, and that regulator will have a different approach to funds segregation.

It could be that the operator applies the same principals declared under the UK to customer deposits in other jurisdictions. The Stars Group has historically made it their policy to afford the highest protection for players regardless of what is mandated by each regulatory body, and it has lobbied for higher scrutiny put on it and its competitors. Others may well use the same system for all player funds, as it is simpler to house all money in the same manner (a recent public statement from a partypoker representative, for example, says that all player funds fall under the same “basic” protection as applied in the UK).

The best thing to do if you are not sure is to check yourself. Declarations can be found in the terms and conditions of each site, usually linked to from the footer of the homepage. In the T&Cs, search for a phrase like “protection” and see if and how they declare player fund segregation. If in doubt, contact customer support.

And if you play on a UK site not listed here, please let us know.