Ladbrokes, the UK’s biggest betting company finds itself in a spot of bother after a report in The Times (£) newspaper highlighted a case where it actively encouraged a problem gambler to gamble from overseas.
The gambler concerned, who has not been identified, worked as a UK real estate broker in Dubai for three years but continued to gamble with Ladbrokes online through that time by using a VPN.
Ladbrokes actively encouraging VPN use
According to the Times report, the gambler had his own Ladbrokes VIP manager, which is common for gamblers who wager high stakes or gamble large sums of money over the course of a year.
He claims that when he moved to the United Arab Emirates (UAE), this VIP Manager explained that he could use a VPN in order to access his Ladbrokes account from overseas. The gambler even alleges this encouragement went as far as to be offered a free Apple iPad with a VPN already installed and set up for him.
The VIP Manager apparently explained that the gambler would have to use a UK-based address with his Ladbrokes account rather than his Dubai one.
However, he added that by connecting to a UK-based server he would be able to use his account freely despite gambling being illegal in the UAE and the practice being against Ladbrokes terms and conditions.
The practice of using a VPN to access online betting accounts overseas is not an uncommon one. We have written previously about the best VPNs to use for the job. However, we have always cautioned that the method was against the terms and conditions of most betting companies and also illegal in some countries.
Anyone who does decide to use a VPN to gamble from overseas should be aware that they could be breaking the law and if the betting company in question catches them, they could withhold winnings and even suspend their account.
This is the first instance we have encountered in which the betting company itself is actively encouraging customers to use a VPN. It does suggest that Ladbrokes and other betting companies are not too concerned about the practice and probably not working too hard to prevent it.
The problem with addiction
Unfortunately, in this instance, the outcome was not a happy one. While many people use a VPN to access their betting accounts and place the odd bet while on holiday, the gambler in this case was an addict and his gambling quickly spiralled out of control.
Despite only earning around £150,000 a year, the gambler in question was betting more than £750,000 by 2013 and by 2016 this figure had shot up to a whopping £6.6 million.
He ended up stealing more than £1.8 million from five investors to fund his gambling addiction. He was also using his Ladbrokes account to move substantial sums of money from Dubai to the UK, which is a classic money-laundering technique.
In February last year, Ladbrokes agreed to make a payment of £975,000 to those who had money stolen. They also made an additional and apparently substantial ‘goodwill payment’ to the gambler concerned.
But they have stoked massive controversy by refusing to accept any liability and by forcing those affected to sign a non-disclosure agreement. This stated that “the claimants agree not to bring any complaint or make any report to any regulator in relation to the claim.”
NDAs increasingly common
This is not the first time a betting company has been found to have used non-disclosure agreements to try and stop people raising complaints against them with regulators. Paddy Power Betfair was fined for using a similar NDA last year.
The betting industry regulator, the Gambling Commission, is continuing to look into the matter and has stated that it is concerned about the use of NDAs to stop people reporting regulatory concerns to them.
However, it has not made any comment on the use of VPNs in the case. That practice is much harder for them to clamp down on because it is almost impossible for a betting company to know if a customer is using a VPN or not.
They could try to go down the same path as the likes of Netflix and the BBC and seek to block VPNs from accessing their service. But such a practice is very expensive and largely ineffective.
Provided an online gambler uses a kill switch to ensure their VPN connection cannot drop out while logging into their account, there is very little that these companies can do to stop them.
As this case illustrates, no betting is without risks. If you feel like you’re spending too much time or money betting then be sure to check out GamCare who can help.