David Clifton: Licensing Expert – Is a regulatory crackdown on gambling advertising around the corner?

CliftonNewspaper reports over the last week have focused on suggestions that Theresa May’s government is shifting its stance on gambling advertising, with so far unsubstantiated, but supposedly well-informed, rumours that we could see a blanket ban on all gambling advertisements before the 9pm TV watershed and incorporation of gambling advertising practices within the ongoing FOBT review.

This has followed:

  • comment last month by Tracey Crouch, the Minister with responsibility for gambling, that “the Government is committed to ensuring that people, particularly the young and vulnerable, are protected from the risk of gambling-related harm. We are keeping the issue of advertising under review to ensure that sufficient protections are in place, and will not hesitate to take further action if necessary”,
  • a speech at the World Regulatory Briefing by Gambling Commission chief executive Sarah Harrison on 8 September in which she referred to (a) the need “to press industry to do more to ensure that its advertising is socially responsible and does not mislead”, commenting that “operators have much more progress to make yet in the way they … ensure advertising is clear” and (b) the Commission’s longstanding concern about the effect of gambling advertising on children and young people, and
  • more recently, publication by the Commission of a paper entitled “A two-way conversation plan; our plan for communicating with consumers” which is designed to better enable the gambling regulator to “tap into consumer concerns, understand consumer interests and communicate better with consumers”.

Given that each year the ASA considers over 30,000 complaints about approximately 20,000 adverts and, according to a recent report, over a quarter of complaints to the Advertising Standards Authority relate to betting and gaming adverts, it seems inevitable that gambling advertising will be near the top of those consumer concerns.

The last month alone has seen complaints of misleading advertising breaches of the CAP Code upheld by the ASA against the country’s major three bookmakers:

  • Coral Interactive for three entirely separate breaches, including for (a) implying that a free bet offer was open to everyone when that was not the case, (b) failing to ensure that a future time-sensitive promotion included all significant conditions within the main body of the advertisement and (c) circulating an outdated email promotion for a sign-up bonus for new customers that had been replaced by a subsequent offer,
  • Ladbrokes for sending promotional marketing material for an “exclusive” £10 Free Bet offer to a customer who was ineligible to take advantage of it, and
  • William Hill for non-inclusion within the main body of its advertisement of a significant term relating to odds on a bet on the EU Referendum that was considered likely to affect a customer’s understanding of the offer.

Last month also saw two separate complaints to the ASA upheld against another operator (Cosmo Gaming Company Limited, trading as NetBet) with warnings issued (a) not to claim that consumers would receive money back if the refund offered was not withdrawable as cash, (b) to ensure that tweets included significant conditions to their promotions and (c) to ensure that future advertising did not glamorise gambling by suggesting that it could enhance personal qualities and living standards, particularly by offering financial security.

In addition, it is worthy of note that listed on the current “Rulings” page of the ASA website is an “informally resolved case” on 5 October relating to the Senet Group. The ASA describes an “informally resolved case” as one in which agreement is concluded (following consideration by the ASA of complaints received) to amend or withdraw advertising without the need for a formal investigation. The Senet Group was of course specifically set up to promote responsible gambling standards and to ensure that the marketing of gambling is socially responsible. In addition, one of its independent directors is herself a member of the ASA Council, the very body that decides whether advertisements have breached the Advertising Codes.

Some think that the ASA needs stronger powers. The ASA itself states that its main aim is to “bring about compliance with the Advertising Codes, rather than punish advertisers” and it considers bad publicity to be one of the most persuasive sanctions within its control, on the basis that an advertiser’s reputation can be badly damaged if it is seen to be flouting advertising rules designed to protect consumers.

However, given the regularity with which gambling operators find themselves censured by the ASA, it must be questionable whether they are overly worried about complaints being upheld. Paddy Power has gained a reputation for pushing the boundaries of acceptable bad taste. Its Oscar Pistorius ad, with 5,525 complaints, took the top spot in the ASA’s list of 2014’s most complained about adverts, yet it “got away with” merely being told to ensure that its future ads do not cause serious or widespread offence and do not bring advertising into disrepute.

Given the increasing concerns about gambling advertising to which I have referred at the beginning of this article, I can’t help but wonder how long it will take before clause 6.6 of the Memorandum of Understanding between the Gambling Commission and the ASA is invoked against a licensed gambling operator who persists in breaching the Advertising Codes. That clause states as follows:

“If the advertiser refuses to comply with the codes or an ASA adjudication, or has repeated breaches of the codes, the ASA will consider referring the case back to the Commission for possible regulatory action under the Gambling Act 2005. The ASA will consider whether referral to the Commission would be most likely to lead to a cessation of advertising”.

As the MoU goes on to say, such a referral could prompt a review of the operator’s licence or prosecution by the Commission. If I was to rely upon my crystal ball, I would suggest that the strongest likelihood of this occurring in the present regulatory climate could arise from the Commission’s continuing work with the ASA in relation to concerns about the appeal to children of the use of cartoon characters in gambling advertisements.

There is a precedent in this respect as, in August, the ASA upheld a complaint against an email advert by Ladbrokes that featured imagery and text relating to the film Iron Man 3, featuring the Marvel comic book superhero Iron Man. This was considered to breach rule 16.3.2 of the CAP Code that requires that “marketing communications must not be likely to be of particular appeal to children or young persons, especially by reflecting or being associated with youth culture”.

If such a referral does happen, it should come as little surprise bearing in mind not only the Commission’s concern that such advertising has the effect of “normalising” young people to gambling products and services, but also paragraph 13 of the Gambling Industry Code for Socially Responsible Gambling that states categorically that “in relation to social responsibility in advertising the Gambling Commission will pay particular attention to the objective of protecting children and other vulnerable persons from being harmed or exploited by gambling”.

__________________________

David Clifton – Director – Clifton Davies Consultancy Limited

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