Most start-up businesses share a common expectation of commercial success. Whilst wholly admirable in terms of optimism, a danger nevertheless exists that this can on occasions border on misplaced over-confidence in what they perceive to be the inevitable consequence of their earnest endeavours, without there necessarily having been adequate advance focus on their advertising and marketing strategies.
In the gambling sphere, when considering a licence application, the Gambling Commission investigates, amongst other things, the past and present financial circumstances of the applicant and any persons relevant to the application to ensure that sufficient resources will be in place to carry out the gambling activities proposed. This involves consideration of the sources of funding for the business, the business plan and the projections of future financial performance. However, in the absence of any glaring errors or miscalculations, it is not the role of the Commission to test the merits of such plans and projections or the prospects of success of the advertising and marketing strategies that underlie them.
However, as with all businesses, it will be those strategies that will to a large extent determine whether a new gambling venture succeeds or fails and all (a) entering this sphere of industry or (b) otherwise becoming licensed in Great Britain for the first time need to be aware of the controls and restrictions that are imposed specifically to prevent illegal and misleading or unfair gambling marketing and advertising and to minimize the risk of harm to young and vulnerable people from such marketing and advertising.
It is a measure of the Gambling Commission’s concerns in this respect that:
- it regards the person responsible for marketing and commercial development of a licensed operator as holding a key management function for licensing purposes, and
- its Licence Conditions and Codes of Practice (“LCCP”) contain five pages devoted to restrictions on marketing, including a requirement that gambling operators must comply with the advertising codes of practice which apply to the form and media in which they advertise their gambling facilities or services. The Committees of Advertising Practice codes on (a) non-broadcast advertising, sales promotion and direct marketing and (b) broadcast advertising can be viewed at https://www.cap.org.uk/Advertising-Codes/Non-Broadcast.aspx and https://www.cap.org.uk/Advertising-Codes/Broadcast.aspx Helpful guidance on those codes is given by the Committees of Advertising Practice at: https://www.cap.org.uk/~/media/Files/CAP/Help%20notes%20new/
In the intensely competitive environment in which all gambling operators targeting custom from British consumers have to work, whether start-up or established, it is worth summarizing in the remainder of this article some key issues concerning the advertising of gambling that such operators (and those marketing their services) must bear firmly in mind at all times.
Following the changes implemented by the Gambling (Licensing and Advertising) Act 2014, requiring that gambling operators wishing to advertise to consumers in Great Britain or provide them with remote gambling facilities must be licensed by the Gambling Commission, a four-strand review of gambling advertising took place during 2015, arising from which:
- the Advertising Standards Authority (“ASA”) was satisfied that it had been meeting its key objectives of protecting young people and vulnerable adults in its decisions on complaints about gambling adverts. Key requirements in this respect include the following:
- as a general rule, marketing communications must not include a child (ie aged 15 and under) or a young person (ie aged 16 or 17),
- no-one who is, or seems to be, under 25 years old may be featured gambling or playing a significant role,
- individual adults who are, or seem to be under 25 years old (ie 18-24 years old) may be featured playing a significant role only in marketing communications that appear in a place where a bet can be placed directly through a transactional facility; for instance, a gambling operator’s premises or own website, and
- in all others instances, including social media, under 25s must not feature.
- the Committees of Advertising Practice (“CAP” and “BCAP”) expressed their satisfaction that recent evidence did not provide a significant case for changes to their rules,
- the Gambling Commission strengthened provisions in the LCCP by requiring the marketing of promotional offers – such as free bets and bonuses, on which I comment further below – to adhere to the CAP/BCAP rules and guidance and be open, transparent and not mislead, and
- the Industry Group for Responsible Gambling introduced a series of enhancements to the Industry Code for Socially Responsible Advertising that come into force in February 2016. This Code, the second edition of which can be viewed at ( http://cliftondavies.com/gambling-sector-tightens-advertising-code) is designed to supplement the CAP and BCAP codes by setting minimum industry standards in a limited number of areas that are not covered by the CAP/BCAP rules. The enhancements include:
- a requirement to have socially responsible gambling messages at the end of all television and radio adverts
- the removal from pre-watershed television advertising of sign up offers that are targeted at new customers
- pre-watershed television advertising cannot make reference to other gambling products that would not normally qualify for pre-9.00pm exemption
- improved prominence to be given to co.uk in all print and broadcast adverts
- reference to gambleaware.co.uk will now have to be included in all television programmes sponsorship undertaken by gambling operators
- the inclusion of clear 18+ or ‘no under 18s’ messaging on all print and television adverts, and
- new provisions to cover aspects of marketing on social media (for example, all gambling operators should have on their corporate webpages (i) responsible gambling messaging and (ii) links through to sources of more detailed information).
Other important considerations to bear in mind include the following:
- marketing companies are required to offer consumers the opportunity to opt out of receiving email and text message (SMS) marketing. An opt-out service should be available within every marketing text or email. If a consumer still receives marketing messages after opting out, he or she can complain to the Information Commissioner’s Office. The rules on electronic mail marketing are published on the ICO’s website at https://ico.org.uk/for-organisations/guide-to-pecr/electronic-and-telephone-marketing/electronic-mail-marketing
- arising from complaints about betting tipsters, typically about whether :
- the advertiser has predicted the winners they claim,
- they have exaggerated the level of winnings and
- they have selected either the period or the horses to give themselves an artificial advantage,
separate guidance has been published by CAP in relation to the marketing of better tipster services, that can be accessed at: https://www.cap.org.uk/~/media/Files/CAP/Help%20notes%20new/Betting_Tipster_Marketing.ashx
The Gambling Advertising Monitoring Unit (GAMU) has been set up as a collaborative working forum (comprising DCMS, the Gambling Commission, Ofcom, ASA, CAP & BCAP and PhonepayPlus) that is committed to working together to share information and address matters of concern relating to the advertising of gambling.
Those matters of concern include the marketing of free bets and bonus offers, including by way of social media and affiliate marketing. LCCP social responsibility code provision 5.1.7 (Marketing of offers) reinforces the existing rules set out by the Committees of Advertising Practice and requires that marketing material does not amount to or involve misleading actions or misleading omissions.
As a general rule, conditions and factors that are likely to affect a consumer’s decision to participate in a promotion (such as – but not limited to – restricted odds and deposit, wagering and withdrawal requirements) must appear, with sufficient prominence, in the advertisement itself. The Gambling Commission has advised:
- “if unsure, include it” and
- if time or space is genuinely limited (for example a small pop-up banner) then these conditions must be made available within one click.
To avoid making mistakes made by others, it is worth checking on a regular basis the weekly ASA rulings that are published at https://www.asa.org.uk/Rulings/Adjudications.aspx the most recent of which (6 January) included a ruling upholding a complaint regarding email marketing conducted by a licensed gambling operator. The ASA found that consumers were not sufficiently made aware of significant applicable conditions affecting the offer contained in the emails.
It should be borne in mind that operators or advertisers who breach the CAP/BCAP rules face referral by the ASA to the Gambling Commission or Ofcom for potential additional sanctions.
Those readers wanting to read more on this subject might find interesting a recently published House of Commons Library Briefing Paper on Gambling Advertising that can be accessed at http://cliftondavies.com/house-of-commons-library-briefing-paper-on-gambling-advertising/
Article by David Clifton – Director of Clifton Davies Consultancy