It has been revealed that gambling companies in the UK have been abusing non-disclosure agreements (NDAs) by paying out vast amounts of money to consumers in return for them not speaking to the regulator about any wrong-doing on the bookies part.

The UK Gambling Commission, which acts as an industry watchdog and regulator, has issued a warning to the industry and said that it was investigating into cases where this has happened.

In not making it legally possible for consumers to report regulatory offences, or explicitly preventing them from contacting the Gambling Commission, it can allow for widespread negligence by the bookies to take place with impunity.

One case, reported by the Guardian, saw Ladbrokes agreeing to pay nearly £1m to the victims of a problem gambler, who had stolen the money he was using to bet.

The problem gambler had been wooed by Ladbrokes with thousands of pounds worth of gifts over a two-year period but later admitted stealing from clients to fund his addiction.

As a condition of the licences gambling firms need to operate, they must check the source of funds of all customers placing large bets.

“The scary thing is that the increase in time and money I spent gambling was huge. I cannot believe it was not noticed and checked. I should have been asked questions.” – problem gambler

To receive the settlement from Ladbrokes, the claimants that the problem gambler stole from must: “agree not to bring any complaint or make any report to any regulator in relation to the claim”.

The Gambling Commission has issued the following public statement on NDAs to make sure that gambling companies ensure that:

• non-disclosure clauses do not result in consumers feeling they are unable to notify the Commission or other regulators or law enforcement agencies of conduct which might otherwise be reported

• licensees notify the Commission of offences under the Gambling Act, including breaches of licence conditions or social responsibility codes of practice

• consumers do not refrain from reporting matters to the Commission because they anticipate a settlement which contains a condition that states they will not complain to the Commission

• those suffering gambling-related harm can freely discuss their gambling history with treatment providers.

CARE Spokesperson James Mildred said:

“Gambling companies have a strict duty of care to their consumers, particularly in relation to how they operate and look out for problem gamblers. This cannot and should not ever be compromised.

“The abuse of non-disclosure agreements by bookies mean that negligence and malpractice carried out by gambling companies has gone unreported and unpunished.

“This is very likely only the tip of the iceberg. Who knows just how many victims have been not only affected by wrongdoing on the bookies part but then forbidden to report the failing, meaning that the wrongdoing can continue.

“We hope consumers who have fallen victim to wrongly-used NDAs will reach out to the Gambling Commission so that an accurate picture of the scale of the damage wrought can be achieved and gambling companies can be appropriately punished.”

Read more about our work on gambling here.