The UK’s Gambling Commission has warned the industry over the use of gagging orders, after incidents of consumers being paid substantial sums of money in return for agreeing not to talk to the regulator.
In an “industry warning notice”, the commission said it was aware that some companies had included non-disclosure clauses within settlements with consumers, adding that it was continuing its investigation into these.
In one case, reported by the Guardian, Ladbrokes, one of Britain’s biggest bookmakers, agreed to pay nearly £1m to the victims of a problem gambler who had stolen the money he was using to bet, in return for a pledge not to inform the watchdog.
The gambler, a British citizen who ran a property business in Dubai, later admitted to having stolen from his clients in order to fund his gambling, which ran up to £60,000 a day.
After five of his victims made a complaint against Ladbrokes for allegedly accepting stolen funds, the bookmaker agreed to pay them a combined sum of £975,000.
According to a settlement agreement seen by the Guardian, Ladbrokes demanded that they agreed “not to bring any complaint, or make any report to any regulator in relation to the claim” in order to receive the money”.
The Gambling Commission has said it is investigating. Ladbrokes has said it is cooperating with the regulator.
In its warning, the watchdog said: “Some of these agreements may have had the effect of preventing those consumers from reporting regulatory concerns to us, by either excluding disclosure to any third party or, in some cases, explicitly preventing customers from contacting the Gambling Commission.
“We recognise that in certain commercial contexts, use of NDAs [non-disclosure agreements] is commonplace and such agreements, when used properly, can benefit both parties. Examples of appropriate use might include resolving supplier or intellectual property disputes. This statement should not be taken to prohibit the use of NDAs in appropriate circumstances.”
It said it was keen to ensure that non-disclosure clauses did not result in consumers feeling they were “unable to notify the commission or other regulators or law enforcement agencies of conduct which might otherwise be reported”.
The regulator also wants to make sure that those suffering gambling-related harm can freely discuss their gambling history with treatment providers.