Gambling advertising in 2014 and what to expect in 2015
This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
Overview
The changes to gambling regulation in Great Britain brought about as a result of the introduction of the point of consumption regime, combined with increased scrutiny from a number of regulators meant that those responsible for gambling advertising campaigns had a very busy 2014.
In this look back at 2014, we examine these changes, and also touch on some of the other key trends and issues in the gambling advertising space, including the ASA's review of the current regulatory process and new CAP guidance on the targeting of children.
We also look ahead at some of the trends and developments that can be expected in 2015. 2014 saw very significant spend across the industry, with operators competing to build market share ahead of the introduction of point of consumption in December, and it will be interesting to see the continuing impact of this in the coming year.
Regulatory changes
Barriers to entry removed
The Gambling (Licensing and Advertising) Act 2014, which amended the Gambling Act 2005, fundamentally changed the gambling advertising landscape by allowing previously barred entities to advertise their services in Britain. Under the old regime, only operators licensed in the EEA, Gibraltar or White List territories were able to advertise in the UK. The new Act means that all operators licensed by the British Gambling Commission are able to advertise in Britain (regardless of where they are themselves located). The amendments also mean that non-remote operators whose facilities are located outside GB may also advertise in Britain (and do not require a licence to do so). Further, while still the subject of some debate, it also seems to be the case that remote operators not licensed in Britain who employ effective blocking technology to prevent players within Britain using their facilities for gambling, can advertise their facilities in Britain.
What does this mean for me?
It is important to state that although in principle, overseas operators can now advertise in the UK, for the most part they will still need a British gambling licence in order to do so. Thus, in practice, new entrants to the advertising market will have a licensing hurdle to clear.
Nevertheless, those overseas operators that do obtain British licences will undoubtedly wish to promote their services, meaning that there will be new entrants to the gambling advertising field. With the sector already highly competitive, brands will need to continue to fight hard to differentiate themselves and gain market share.
Regulatory reviews
As part of the Parliamentary debates around what was then the Gambling (Licensing and Advertising) Bill (since implemented into law as the Act of the same name), the Government asked various bodies, including the Gambling Commission, the Advertising Standards Authority ("ASA") and the Remote Gambling Association to report on the state of the gambling advertising market. In our report at the time this process was announced in May, we noted that gambling companies in the UK spent approximately £690 million on marketing in 2013, and that the proposed review was born out of the increased volume of gambling advertising in recent years.
The ASA
In October, the ASA published its contribution to the process, bringing out a review of the way it applies gambling advertising rules.
The review was generally supportive of the status quo. It's "Conclusions" section stated: "we're satisfied that we've predominately been getting it right."
The review also drew on research with focus groups to identify what it considered to be key issues from a regulatory viewpoint. Most prominent among these were promotional offers in advertisements, in particular "free bets". The review concludes at one point: "The survey… indicates that it would be sensible for the ASA to consider closely future complaints received about the social responsibility of such offers."
The ASA review was very strongly criticised by Freebets.com, which called for it to be withdrawn, on the basis that the figures and research it was based on were not put in context, that the sample size and make-up of respondents was too small, and that the conclusions drawn by the ASA were incorrect.
Gambling Commission
In April, The Gambling Commission put out a statement, setting out the terms on which it would be conducting its own review of licence conditions and terms of practice, in particular in respect of free bets and bonus offers. This was followed by its social responsibility consultation in August 2014 that raised questions about gambling advertising in general and proposed changes to the Licence Conditions and Codes of Practice that apply to all Gambling Commission licensed operators. The consultation has closed and its results are expected to be published in February 2015.
What does this mean for me?
It is clear from the ASA review that promotional offers, in particular free bets and bonuses, are firmly in regulators' sights. The review states that the ASA will "prioritise potential breaches relating to sales promotions in gambling ads", and that it will be proactive in this area, not only responding to complaints by members of the public but actively raising problems and issues with advertisers.
Advertisers should therefore be particularly careful when devising promotional offers. This will involve monitoring the prominence of key terms and conditions within advertisements, and making sure that the advertisement as a whole cannot be viewed as misleading. However, the review recognises that at present there is a lack of definitive guidance on what is acceptable, and states that the ASA aims to publish more formal adjudications in this area in order to help establish a body of precedent.
Once the Gambling Commission has produced its response to its social responsibility consultation, operators will need to ensure that they are ready for the coming into force of new licence conditions later in the year and that they are producing campaigns that are compliant with any new requirements.
Further CAP/ASA guidance in 2014
Targeting of children
In December, the Committees of Advertising Practice ("CAP"), which write and maintain the UK Advertising Codes, issued guidance on how to avoid marketing to children. This was brought out in response to the risk, in particular on electronic media, that advertisers will inadvertently fall foul of the regulations by advertising in spaces potentially accessible by children. The CAP guidance identified a number of positive examples of advertisers who had appropriately targeted their content, including:
- an advert featuring furry cartoon characters that could potentially appeal to children and that appeared on an operator's Facebook page did not breach the rules because access to the page was restricted to over-18s;
- an age-restricted Mecca Bingo post on the X-Factor Facebook page. As this could only be seen by Facebook users registered as 18 or over the ASA held that the advertiser had taken reasonable steps to prevent minors seeing the ad;
- Ladbrokes placed an advert on its Youtube channel that could be seen by under-18s. As the content was unlikely to appeal to minors, and youngsters were unlikely to make up a significant proportion of visitors to the channel, the ad was held to have been appropriately targeted.
What does this mean for me?
The clear expectation is that advertisers must take reasonable steps to prevent their advertising being directed at under-18s. These steps include avoiding content that might be seen as directed at children, such as the use of toy brands or comic book characters.
General Guidance
The ASA's general guidance on gambling advertising restated some of the basic principles to which advertisers should adhere, including not:
- portraying, encouraging or condoning socially irresponsible gambling behaviour;
- exploiting the susceptibilities of children or young people;
- suggesting that gambling can solve financial worries; or
- linking gambling to sexual attractiveness.
The guidance refers to some examples where the ASA banned individual adverts. These include an advert which linked gambling with seduction, and a campaign in a national newspaper which used a popular children's character (Optimus Prime from Transformers) to promote gambling.
A further Help Note on gambling advertising issued by CAP and BCAP (the Broadcast Committee of Advertising Practice) came out in January 2014.
ASA Rulings
A number of the ASA's 2014 rulings provide helpful insight into the approach the regulator will take to gambling advertisements. We've summarised some of these below. Complete summaries and further rulings are available on the ASA's website:
26 November: Health Lottery: 2 weeks' free play
This Video-on-demand advertisement promoted an online direct debit offer for the Health Lottery whereby consumers could have their first two weeks play "free", if they signed up online and paid for their tickets monthly. The ASA held that "the emphasis on a £160 refund, which required a commitment of £320, was likely to encourage consumers who would not normally have spent £40 on twice weekly draws to spend more than they otherwise would have done, to their detriment in some cases", and the advert was found to breach the Cap Code.
17 September: "Ladbrokes Life"
Various complaints were made about this advertising campaign, most of which were not upheld. However, two individual advertisements were found to have breached the Cap Code, on the basis that the slogans "WHEN YOU WIN IT'S SKILL - WHEN YOU LOSE IT'S BAD LUCK" and "ONCE IS LUCK - TWICE IS TALENT", condoned an irresponsible attitude towards gambling.
6 August: Sporting Index and 27 August Ladbrokes t/a Betdaq "Christ the Redeemer"
Both of these campaigns featured images of the "Christ the Redeemer" statue in Rio de Janeiro, and were found to cause harm and offence. In addition, it was held that the Sporting Index advert, also featuring a scantily-clad woman, breached the CAP Code by linking gambling to sexual success.
28 May: Coral Interactive sexy jockey
This advert, which featured an attractive female jockey with a bare midriff, was found to have linked gambling with seduction, and so was in breach of the BCAP code.
5 February 2014: bet365 "Free bet offer"
A website promoted a "Free bet offer", claiming to give gamblers a free bet on a later race if they backed a winner with their initial bet. A customer argued that this was misleading, because to take advantage of the offer, individuals also had to place a further bet on the subsequent race. The ASA upheld the complaint on the basis that the requirement for further expenditure to use the free bet rendered the term "free" misleading.
Senet Group
In brief
In September 2014, William Hill, Ladbrokes, Coral and Paddy Power announced that they were forming the Senet Group. This group was formed with the stated aim of responding to public concerns about gambling, and in particular gambling advertising. Members pledged:
- not to advertise free bet or free sign-up offers on TV before 9pm;
- not to advertise gaming machines in betting shop windows, and
- to dedicate 20% of shop window advertising to responsible gambling messages.
Most recently the Senet Group launched a TV ad campaign with the aim of preventing problem gambling.
It remains to be seen whether other operators will follow suit, but operators should be aware of these commitments when considering future campaigns.
Conclusions and the year ahead
2014 was a momentous year in gambling, and advertising was one of the key areas in which industry issues were played out. Volumes of gambling advertising soared, propelled by the imminent implementation of point of consumption and the traditional World Cup surge. Alongside this increase in gambling advertising visibility came an increasing public awareness of the issues related to it, as reflected in the founding of the Senet group by some of the industry's leading players.
These issues form the backdrop to what is likely to be another busy and fast-moving year for everyone involved in gambling advertising. The first few months of 2015 will start to reveal what impact the increased tax burden on gambling operators will have on their marketing spend, as well as the effect, if any, of new, overseas licensees entering the the market. Technological change will see increasing focus on mobile, and attempts by advertisers to target high-value customers by tracking their internet use. Finally, operators will need to respond to any new regulation introduced as a result of the Government's regulatory review. It is anticipated that the first material changes as a result of this review will be seen in a revised version of the industry code to be published in the next month.
