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Vampires, Iron Man, spread betting, free bet offers and affiliate marketing - gambling and its advertising is still a key focus area for regulators, and the sanctions can be considerable
There have been a number of recent rulings from the Advertising Standards Authority (ASA) and the Gambling Commission relating to advertising gambling.
Gambling features regularly in the ASA’s reports, suggesting that its advertising continues to be a cause for concern among consumers and so an issue for regulators. The recent ASA rulings and Gambling Commission action discussed in this note illustrate the current focus on social responsibility and in particular protection of children, as well as the ongoing emphasis on ensuring that consumers are treated fairly and the use of all enforcement powers.
Recent ASA rulings
Virgin Games: Virgin Games ran a TV advert involving a vampire called Vladimir who wanted to “live a little”. Looking for new activities to relieve his boredom after being undead for eternity, he had started playing Virgin Games. Members of the public had complained the advert was socially irresponsible by suggesting gambling would make life more thrilling, encouraging people in financial hardship to gamble and portraying gambling as a light-hearted way to pass the time when bored. After considering how and why vampires might typically spend their time, the ASA did not uphold any of the complaints. It considered it was reasonable to depict betting as a leisure activity involving an element of excitement provided it did not encourage irresponsible gambling behaviour; Vladimir spent his days watching television with the curtains closed not because of financial hardship but because he was a vampire who had to avoid daylight; joking with his girlfriend while washing up (“it’s not ketchup …”) indicated his happiness was not dependent on gaming; and the association of gambling with the phrase “live a little” was a pun on Vladimir being undead and consistent with playing Virgin Games for light amusement by betting mindful amounts of money, reinforced by the “Play Responsibly” message at the end of the advert. The ASA’s ruling is available here.
Ladbrokes: The ASA reversed its ruling last August on an advert run by Ladbrokes Betting & Gaming Ltd. An email for Ladbrokescasino included an image of Iron Man and references to the film Iron Man 3. The complaint suggested the advert was irresponsible because it was likely to have particular appeal to children. In its response Ladbrokes said that all its email offers were sent either to registered customers or to consumers who had been validated as being over 18 years of age and so the image would not have been seen by children or young people, and also argued that, based on data from attendance at Comic Con events and Facebook demographics for the Marvel brand, followers of Marvel comics and superheroes were predominantly adults. The UK Code of Non-Broadcast advertising and Direct & Promotional Marketing (the CAP Code, administered by the ASA, requires that gambling ads must not be likely to be of particular appeal to children or young people, especially by reflecting or being associated with youth culture. While recognising that the Iron Man character would appeal to many adults, the ASA considered that comic books and the availability of various related toys meant that Iron Man was likely to have particular appeal to under-18s. However, as Ladbrokes’ email was sent only to registered customers and others who had been validated as being over 18 years of age, the ASA considered that it was extremely unlikely that anybody under 18 would have seen the advert and on this basis it was not irresponsible. The ASA’s ruling is available at here.
FxPro: In contrast the ASA upheld a complaint relating to a TV advert for FxPro, an online broker providing contracts for difference (CFDs), including spread betting, where the audience had not been sufficiently limited. The advert was shown on Bloomberg TV and featured a young adult checking fluctuations in the Euro to GBP currency rate and showing the currency rate to other students. A voice-over said “What can I say, I am a risk seeker. For me, trading is about being in the moment.” and “Surfing that wave for as long as it holds. And when the price changes direction, I go back in and profit on the way down. Some say it’s too risky. For me, it’s a thrill. Fortune favours the brave, right?”. The complaint alleged the advert was irresponsible as it encouraged young adults to trade complex, high risk financial products throughout the day. Bloomberg Media, responding on its own behalf and that of FxPro, said that the advert had been shown on a specialist financial channel which was targeted at a specialist audience and included adverts for products available only to consumers who had passed a vetting process demonstrating relevant financial trading experience and also referred to the risk warnings in the advert referring to the significant risk involved in trading CFDs. Despite this, the ASA found that the advert would appeal to young adults and students who were likely to be inexperienced in trading CFDs – the main character was a young adult who checked the status of the investment as soon as he woke up and was shown checking it again in a college setting with his friends; in the final scene he appeared to be showing the results to his friends, including a woman he then put his arm around. The ASA also considered that the advert placed undue emphasis on the potential benefits of investing in a complex financial product which involved a significant risk of loss. Accordingly it ruled that the advert was irresponsible, regardless of any pre-vetting of the audience and so breached the UK Code of Broadcast Advertising (the BCAP Code, also administered by the ASA) in relation to social responsibility and must not be broadcast again in its current form. The ASA’s ruling is available here.
The different rulings above – with the complaint against FxPro being upheld while the ruling against Ladbrokes was reversed and the complaint against Virgin Games was not upheld – shows the ASA taking a balanced view overall but also emphasises the continued regulatory focus on this area.
Gambling Commission fines BGO £300,000 for breaches relating to marketing and advertising
Advertising is also a concern for the Gambling Commission (the Commission) which recently fined BGO Entertainment £300,000 for breaches of licence conditions relating to marketing and advertising.
In June 2015 the Commission asked licensed online/mobile operators to provide information relating to their compliance with the revised Licence Conditions and Codes of Practice (the LCCP), including new requirements relating to marketing and advertising. Breach of the LCCP may lead to the Commission reviewing, suspending or revoking an operator’s licence and/or imposing a financial penalty.
The LCCP (Social responsibility code provision 5.1.7 on marketing of offers) requires that adverts and offers, including freebet offers, are not misleading and comply with the CAP and BCAP Codes and ‘Guidance on the rules for gambling advertisements’. In particular, adverts must state significant limitations and qualifications. These rules apply to all forms of marketing communications, including social media and affiliate marketing, and the LCCP also makes clear (Social Responsibility code provision 1.1.2 on responsibility for third parties) licensees must take responsibility for third parties with whom they contract for the provision of any aspect of the licensee’s business related to the licensed activities, such as marketing affiliates and advertising networks
BGO was one of several remote operators identified as having advertising which did not comply with this LCCP requirement as its adverts did not include significant limitations and qualifications and so were potentially misleading to consumers. The Commission found that BGO failed to take prompt and effective action to address the issues identified, despite repeatedly providing assurances to the Commission that it understood the requirements and had taken action to ensure that they were met.
In May 2016, as part of measures to reassure the Commission, BGO commissioned a Copy Advice Audit of its website from CAP. This audit made several recommendations in relation to the advertisements on BGO’s website but BGO did not initially follow those recommendations. In the Commission’s view adverts on BGO’s own website continued to breach this social responsibility requirement from May until late July 2016 when BGO made the changes recommended in the audit. Even after this the Commission continued to find evidence of ongoing breaches in relation to advertising on the websites of affiliate partners in the period August to October 2016. Accordingly the Commission found that:
- BGO had failed to act in accordance with the LCCP social responsibility provisions as BGO and its affiliates had published misleading adverts; and
- by failing to take timely and effective action to address the breaches of the social responsibility code when these were raised by the Commission and by providing inaccurate assurances that the problems had been addressed, BGO had acted in a way which cast doubt on its suitability to carry on the licensed activities.
The Commission issued BGO with a formal warning and imposed a fine of £300,000 for breaches of the social responsibility provisions of the LCCP. Details of the Commission’s decision are available here.
The Commission is currently working with the Competitions & Markets Authority in its investigation of whether gambling operators are treating their customers fairly. The Commission and the ASA have been clear for some time that operators must take responsibility for the actions of their marketing affiliates and advertising networks. At the November 2016 Raising Standards conference, at the ICE Gaming Expo in London in February 2017 and in numerous other speeches, the Commission has consistently been clear that:
- operators’ duty to treat customers fairly is an important theme for the Commission;
- advertising and marketing are among the top four areas of consumer concern in relation to the gambling industry and this is a key part of treating customers fairly;
- it is determined to use all its enforcement powers to drive a culture where operators put consumers first and to create credible deterrents; and
- there is a likelihood of higher penalties going forward, in particular where the Commission sees systemic and repeated failings.
The Commission’s actions in relation to BGO reflect the Commission’s emphasis on fair treatment of consumers and also on the operators’ responsibility for the actions of their marketing affiliates and the Commission’s determination to use all its powers where it finds breaches of the LCCP. The industry has been warned!