PLAYER FUND PROTECTION
Player fund protection in Denmark, UK & Netherlands BY BREAKING DOWN HOW LEADING JURISDICTIONS SAFEGUARD PLAYER FUNDS IN ONLINE GAMING JASON FLEISCHER DISCOVERS THERE ARE STILL SIGNIFICANT RISKS
Introduction Online gaming operators temporarily hold player funds between the start and end of games, presenting a risk to players in the form of possible loss of funds in the event of the operator encountering financial difficulties. This issue is contemplated by various European regulatory regimes as part of their licensing processes. This article examines player fund protection strategies in Denmark, the UK and the Netherlands. In Denmark, regulations address this risk with a mandate that requires operators to separate player funds into dedicated setting off accounts. In the UK, regulations allow for the Danish approach but go further by allowing for higher levels of player fund protection in the form of insurance arrangements and independently managed trust accounts. The final jurisdiction
being examined is the Netherlands, where funds are required to be held by an independent third-party. We will explore how these different approaches impact operators and players in light of a recent Danish bankruptcy court judgment. In the case it was found that player funds, even when held in the required setting off account, could still be considered part of a failed operator’s assets in the event of bankruptcy. Below, brief details of the case will be set out and the court’s reasoning explained. This will then be contrasted with potential alternative solutions in the form of the approaches taken in the UK and the Netherlands. For operators, understanding these varying fund protection measures helps mitigate risks and assure player security across jurisdictions.
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IMGL MAGAZINE | DECEMBER 2024
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