Historical failings... but should bwin have known better over 'risk-free' marketing?

ElectraWorks, the company behind the Danish domain of Entain’s international sportsbook bwin, has been fined DKK 500,000 ($77,034) after the Danish Consumer Ombudsman filed a complaint with the Copenhagen City Court. 

What happened in Denmark?

An investigation found that ElectraWorks ran a campaign offering "Risk-free gaming up to 1,000 kr" and "Risk-free gaming up to 500 kr" between October 2020 and December 2022. 

While many operators offer promotions that allow customers to place a second bet if their first one fails, the terms and conditions of this offer were different. 

Under the offer, if a customer lost their first bet, then they were awarded a second “Freebet,” but only the net winnings would be paid out to the customer. 

So, when a customer accepted the offer in 2024, they placed a bet of DKK 1,000 on bwin.dk. 

After losing this bet, they received a “Freebet” that was ‘worth’ the original DKK 1,000; but when this bet came in at DKK 1,015, the net winnings were DKK 15 – which was all the customer was able to win.

This meant the customer actually lost DKK 985 through the “risk-free” offer.

The Consumer Ombudsman reported ElectraWorks to the police in May 2024, and the company pleaded guilty during the subsequent proceedings. 

How much was ElectraWorks almost fined?

Torben Jensen, Consumer Ombudsman, said: “When a gambling company markets itself with consumers being able to gamble 'risk-free', it goes without saying that they should not be exposed to a financial risk by placing a bet. 

“It is therefore important for me to emphasise that it is undoubtedly misleading to market yourself with the fact that a game is 'risk-free' if it is not really a question of the consumer not risking losing money.”

ElectraWorks has been fined DKK 500,000 for the misleading wording, which is twice the cost of the marketing campaign.

In the official judgement by the City Court of Copenhagen, a spokesperson said: “The court finds, after an overall assessment and in view of the seriousness of the offence – including the fact that the illegal marketing has been going on for several years and that it is a question of marketing of gambling aimed at, among others, young people and with a view to introducing new customers to gambling, which calls for a special degree of caution – that the fine should generally be set at DKK 1m."

However, the fine was halved due to the long processing time at the court to get it resolved in a quicker manner. 

Should ElectraWorks have been fined?

While it might seem harsh to fine ElectraWorks for something that happened years ago, there is a bit more to this story. 

Once again, ElectraWorks was advertising ‘free bets’ on the bwin website. 

On 17 August 2016, the Advertising Standards Authority (ASA) upheld a complaint from a customer. 

The player deposited £17 under a promotion that read “Make your deposit. Add at least £10 into your account. Receive your Welcome Bonus and we’ll match your deposit with a bonus up to £30!”

The terms and conditions explained that the bonus and deposit must be wagered 1.5 times, but when the customer went to withdraw their winnings, they were told that in order to release the bonus of £17, they needed to wager £102.

A week later, on 24 August 2016, the Gambling Commission in the UK found that ElectraWorks had reinstated the offer on the same website. 

By April 2017, there were six breaches of a similar nature across the operators' other websites, including Party Poker. 

In June 2017, the same breaches were subsequently found again on these sites; And in August 2017, a similar breach occurred on ElectraWorks’ Casino Las Vegas website.

ElectraWorks was ultimately fined £350,000 ($465,416.25) in 2018 by the Commission for repeatedly misleading consumers with adverts relating to free bonuses.

The company was also formally warned by the Commission, because the person responsible for marketing at the business did not hold a personal management licence. 

So, should bwin have known better? 

If the only marketing failure occurred in 2020 and was aligned with other ‘risk-free’ offers promoted by online sportsbooks, then this may have been a harsh judgment by Denmark. 

While it was a contentious point in the industry for a long time (regarding how ‘risk-free’ a free bet could actually be), this was a very common promotion featured by all tier-one sportsbooks. 

However, most of the ‘free bet’ promotions offered a full payout, rather than net winnings only; after all, a promotion is intended to introduce a customer to the company and entice them to play further at the platform, not make them feel that they’ve been duped in the process. 

The other point to consider is: ElectraWorks has been offering promotions with similarly unclear terms and conditions since 2016. Even after the company was warned for these offers, it continued to advertise them across multiple websites and was eventually fined for it by the UK in 2018. 

Ultimately, this seems more like a pattern from ElectraWorks, bwin and Entain, rather than an unfortunate accident in a time when a particular marketing strategy was popular across the market. Only time will tell whether this fine is a push in the right direction for the company, or whether a larger fine is waiting on the horizon.