It is a rare instance in which a bookmaker will go completely bust. Even when failing they are often able to stumble on for quite a while waiting for a buyout or a merger in order for them to continue trading. This was evidenced by Scottish bookmakers Scotbet in 2011, who staggered on for an impressive 12 months before being bought out by their management team.
This reveals a truth about bookies — even when they’re doing badly they’re not necessarily losing money just not profiting as much as they would hope to. This also gives the comforting knowledge that they are unlikely to go bust overnight, assuming there is no illegal book balancing going on.
Ultimately, there is a variety of reasons a bookmaker could close. There is a possibility of illegal practice as with any business. What this means is corrupt high-level management could steal funds which could lead to the eventual bankruptcy of the company. As a criminal case, you would need to go through the courts to get your money back which could take time. Similarly, there may be mismanagement leading to the business going under, however, this is fairly easy to spot as you will notice a lack of investment and some stale offers.
|Name||Date of closure||Reason|
|Marathonbet||April 2022||"Ongoing events in Europe"|
|MansionBet||March 2022||"Competitive market conditions and regulatory environment"|
|MoPlay||February 2020||Licenses suspended|
|BetBright||March 2019||Speculation that 888 purchased the brand for the software, and thus closed it once acquired.|
|Stan James||2017||Unibet acquisition|
Fines are not unheard of in the industry as the issues of gambling addictions are becoming more monitored in the public eye. This can result in governing bodies fining companies, generally, this is aimed at large companies to make a statement. It is unlikely to bankrupt the firm but impact their offers.
Another possibility is that the company itself just has too much competition, since they often operate online or on the high street this can result in franchised companies overpowering or undercutting their more independent competitors. This sort of failure can normally be predicted and the diminishing company will either be bought out or you will have time to withdraw your funds and move on.
One that is not so easy to predict is the possibility of an economic crash which can, like all businesses, kill off an already struggling company. However, there is an odd phenomenon that bookies and the gambling industry does rather well during times of economic turmoil as people turn to alternative methods to pay their bills.
Ultimately it is likely to be a combination of all of the above that results in a bookmaker closing. No business is killed by one aspect but rather it is a death by a thousand cuts; if things are going badly you are likely to spot it before things get too dire.
If you happen to notice your bookmaker is beginning to struggle you should withdraw your funds immediately. When bookies are failing they might start slowly the withdrawals and then give a date for final withdrawal requests to be placed. Keep an eye on this and make sure you’ve begun the process before this final date, the company should aim to get the money back to you in some way.
With any open bets, the company with likely advise on this but in most cases, they will just give you the amount you originally deposited back. In some rare cases, they will payout to a few people who looked very likely to win, as Sun Bets did when they went bust. This is the same with any ante-post or in-play bets too.
Bookies, luckily, have a system in place for this scenario. This is where the Gambling Commission steps in to help punters and make sure a company is adhering to the laws set out in the Gambling Act of 2005. They make sure those who have previously gone bankrupt from the gambling business cannot set up a new business straight away. Furthermore, they ensure that companies can only be bought by those who already hold a UK gambling licence.
Online gambling has been around since the 90s and has grown into the multi-billion pound industry it is now. Its legalisation in the UK means that insurances have been put in place to retain some of your money should the business fold. The way this works is that the money customers deposit must be held separately to the accounts used for running the business, this is known as ring fencing your money. Depending on the business, there are differing levels of coverage the online bookies will provide. These are basic, medium, and high.
Basic denotes a business that offers no extra protection for your money. Whilst the money is held separately while the company is functioning, this means if the company was to fail then your deposit would be seen as part of the business not separate. Surprisingly some big names use this level of protection such as William Hill or Betfred.
Medium is a bookie that has arrangements, such as insurance, that ensure the money is held in separate accounts and is returned to the customer should they go bust. A third party company would pay out in this instance. Some examples of this are Bet365 or Ladbrokes.
Finally, there is high, which as the name indicates is the most preferential coverage. This indicates that the money you put in will be held in an account that is legally separate from the rest of the company, said account is under the control of an independent or external party. Ideal for big deposits or if you’re planning to hold the money in your account for a long time. Coral and Paddy Power are two companies who use this level of protection.
It is a legal requirement for your bookmaker to indicate which level of protection they are offering in the terms and conditions. Unfortunately, many people don’t actually read the terms and conditions on signing up — for most things, not just gambling. This results in people not discovering what level of coverage they had until the business goes under.
A betting firm might also go into administration, in this case, you can wait it out. The business is in the process of being sold so hopefully, a new, interested party will step in. This is incredibly rare due to the need for the administrator themselves needing a gambling license and, similarly to corporate-owned companies, it is unlikely it will go bust overnight.
It is unlikely your bookies will go under without you seeing signs beforehand as there is often much book balancing that goes on before companies reach this point. If the house is losing they will take steps to secure the money and most have insurance for this situation. Online betting is based on probabilities so payouts are a known quantity making it near impossible for an online bookmaker to go bust.
Ultimately, knowing who you’re betting with and keeping an eye on subtle business indicators will put you in good stead. This should help you to avoid any bad consequences if you are unlucky enough to have gambled with a failing bookmaker.