This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
"The CAP Code notes that, in the absence of any qualifying conditions, the average consumer would assume a ‘risk-free’ bet to be a bet where the player does not risk his/her own money. Any terms that run contrary to this interpretation are likely to mislead consumers"
Recent action by the UK Advertising Standards Authority (‘ASA’) against William Hill over the promotion of ‘risk-free’ bets has highlighted the risks involved for operators advertising ‘risk-free’ bets and similar promotions such as ‘free bets’ and ‘free bonus.’ The ASA’s enforcement on this matter, alongside its decision in a similar matter involving Sky Vegas, add to the regulatory landscape around gambling advertising in the UK. Here, Anna Soilleux and Emily Dorotheou of Olswang LLP consider the William Hill and Sky Vegas claims, and provide some practical tips for operators on what to do and what not to do when it comes to gambling promotions.
William Hill is the latest operator to have ‘misleading’ ads banned. The ads were ‘risk-free’ bet ads that offered customers their money back if they placed £5 or £10 bets with the bookmaker. The ASA has ordered William Hill not to repeat the ads after upholding a complaint on the grounds that the terms of the offer were “unclear and contradictory” and “likely to confuse.”
‘Risk-free’ offers, alongside their ‘free bet’ and ‘free bonus’ siblings, are commonplace promotional tools in the gambling industry but are increasingly being subjected to regulatory scrutiny by both the ASA and the Gambling Commission. The Gambling Commission has in recent months issued several warnings to its licensees, reminding them of their duty to comply with advertising codes and their licence conditions regarding advertising. Misleading marketing and unfair terms are firmly on the Gambling Commission’s agenda and operators who persistently breach the rules may find themselves being threatened with a licence review. The requirement to comply with the Committee of Advertising Practice (‘CAP’) Code rules, including those around free bet, bonus and similar offers, are a social responsibility code provision in the Licence Conditions and Codes of Practice. Operators should therefore remember that falling foul of these rules presents a greater risk than an adverse ASA ruling.
Gambling operators are advised to consider the recent ASA rulings and regulatory landscape carefully, and ensure their marketing teams are familiar with the diverse restrictions that apply to their use of advertising.
The William Hill claim
On 30 March 2016, the ASA upheld a complaint made against two promotions published by bookmaker William Hill that offered players £5 or £10 “risk free” bets.
One punter complained that the ‘risk-free’ claim was misleading because the £5 refund could not be obtained unless more money was staked, and secondly that the ‘£10 risk-free’ claim was misleading because they had staked £9.80 of their own money and the 80p won and subsequently lost was not counted as their own money.
The complaints focused on whether the promotions were misleading, falling foul of rules 3.1 and 3.3 of the CAP Code. These rules state that marketing materials must not materially mislead, omit material information or present it in an unclear or ambiguous manner.
William Hill submitted that the promotion was “self-explanatory” and the terms of the promotions were clarified in the accompanying terms and conditions that featured on the same page as the ad. It also highlighted that it had clearly referenced the maximum and minimum amounts that would be refunded if the player did not win.
However, the ASA upheld both complaints on the basis that neither promotion was ‘risk-free,’ as it was not always possible to stake the advertised amounts of £5 and £10 and receive a refund without a player also having to stake some additional money. This was unlikely to be appreciated by players who, on seeing the promotions, would understand ‘risk-free’ to mean that they could stake the advertised amounts and, if they lost the money, would receive a refund that was withdrawable as cash. The explanation of how the promotion worked was also found to be unclear, contradictory and confusing.
Previous ASA rulings and the regulatory landscape
The ASA’s ruling against William Hill, and the more recent Sky Vegas ‘risk-free’ claim, show that the ASA is continuing to clamp down on arrangements described as ‘riskfree.’ Its investigations involve a two-pronged analysis of these promotions: whether these arrangements involve an element of risk for players (so contradicting the ‘risk-free’ claims) and the prominence and clarity of any significant terms and conditions.
The Sky Vegas claim involved a promotion described as “no lose month” and “play risk free,” which mentioned that “terms apply” and set out the maximum refund and wagering requirements below the promotional image. Even though Sky Vegas had set out the significant conditions, the ASA found that the primary claims were contradicted by the promotion’s terms. In the ASA’s view, this rendered the promotion misleading. Similarly, in a claim involving Unibet, the ASA noted that as players were subject to a minimum wagering requirement, and risked becoming ineligible to withdraw the ‘risk-free’ bet amount, these conditions were likely to contradict players’ understanding of the ‘risk-free’ bet offer within the context of the promotion.
The CAP Code notes that, in the absence of any qualifying conditions, the average consumer would assume a ‘risk-free’ bet to be a bet where the player does not risk his/her own money. Any terms that run contrary to this interpretation are likely to mislead consumers. CAP provides examples of terms that have been viewed as contradictory to a ‘risk-free’ promotion, which include:
- requiring customers to deposit and bet with their own money;
- refunding deposits only as bonus funds, which cannot be withdrawn; and
- making bonus amounts subject to minimum wagering requirements before they can be withdrawn as cash.
The ASA has also previously stated that ‘significant terms and conditions’ regarding ‘risk-free’ bets should be set out in the promotion itself. ‘Significant terms and conditions’ are those that relate to consumers’ understanding of the bet and of the commitments required on their part.
It is therefore clear that ‘risk-free’ promotional claims are not safe just because the promotions state that ‘terms and conditions apply,’ and set out the accompanying terms. These terms must not contradict the primary claim and must be clearly and prominently presented to consumers.
The relationship between ‘free’ and ‘risk-free’ bets
The issues surrounding ‘risk-free’ claims sit against an appreciated backdrop of claims against promoters for ‘free’ bet and bonus promotions. The majority of the ‘free’ bet complaints similarly evolve around a lack of clarity, the unfair nature of the terms and conditions and omission of significant conditions, in particular the minimum wagering requirements, which must be met before winnings can be withdrawn.
The ASA considers that consumers who see ‘free’ bet claims would likely understand that they do not need to make any sort of commitment to take advantage of the claim. The ASA has previously stated that any significant terms and conditions regarding ‘free’ bets should generally be set out within the promotion. Examples of significant conditions include:
- the need to make a deposit in order to access a free bet;
- a requirement that new players must bet their initial deposit;
- caps on maximum winnings or bonus funds granted;
- minimum wagering requirements (i.e. the requirement to match the free bet amounts a certain number of times before players can withdraw any winnings); or
- imposing time limits in which bets must be made before winnings or bonus funds expire or are forfeited.
Where these significant conditions have not been made sufficiently clear to players, or have been viewed as contradicting the ‘free bet’ claim, the ASA has upheld consumer complaints.
Practical tips for operators
Some practical tips for operators who are keen to stay on the right side of the rules and the regulators include:
- Remember that the terms and conditions of your promotion may qualify the claim made in the ad but must not contradict it.
- Qualifying statements and other significant terms should be set out in the ad itself, unless the ad is limited by time or space. Significant terms are those that are likely to affect a consumer’s decision about whether or not to participate in an offer.
- If the ad is limited by time or space (for example, a banner or social media ad), include as much information about significant conditions as practicable and clearly direct consumers to an easily accessible alternative source where all the significant conditions of the promotion are prominently stated.
- For online ads that are limited by time and space, ensure the significant conditions are one click away from the ad. Consumers should not be able to access a deposit or registration page and bypass the significant conditions.
- Check that consumers will understand your terms and how the mechanics of the promotion works. If terms and conditions are unclear, confusing or not sufficiently prominent, the ad may be found to be misleading.
This article first appeared in the May 2016 edition of the World Online Gambling Law Report
