MISLEADING ADVERTS


Misleading the way


Susan Biddle, Legal Consultant at Kemp Little LLP, explains how the Gambling Commission is cracking down on misleading adverts.


R


ecently, BGO Entertainment became the first online gambling company to be fined for misleading advertising in Great Britain – a concrete example of the Gambling Commission’s new approach to


enforcement of the rules relating to marketing offers which were introduced in May 2015. The Commission ruled that BGO advertisements


for promotions such as free bets were misleading, citing nine examples on BGO’s own website and a further 14 on associated third party sites, and fined it £300,000 for breach of its marketing obligations under the Licence Conditions and Codes of Practice (LCCP). The LCCP stipulates that adverts and offers, including “free bet” offers, must not be misleading, and in particular must clearly state significant limitations and qualifications. This covers all forms of marketing communications, including social media. Operators are required to take responsibility for third parties with whom they contract for the provision of any aspect of their business which is related to licensed activities; this includes marketing and advertising networks such as affiliates. Back in June 2015 the Commission found BGO was one of a number of licensed online operators whose advertisements failed to give sufficient information about conditions restricting its promotions. Although BGO assured the Commission it would take action, the Commission continued to find advertisements which it regarded as potentially misleading. Last summer BGO made changes in its own website but the Commission continued to find non-compliant advertisements on third party websites advertising on BGO’s behalf, and in September 2016 the Commission began a formal review of BGO’s licence. The Commission found that some BGO advertising,


110 SEPTEMBER 2017


on its own and third-party websites, was misleading and so in breach of the LCCP; BGO’s failure to take timely and effective actions to address these breaches and its inaccurate assurances that the problem had been addressed cast doubt on its suitability to carry out its licensed activities. The Advertising Standards Authority (ASA) and the Commission have been clear for some time that gambling operators need to take responsibility for the activities of their advertising networks and marketing affiliates. This was emphasised at the Commission’s “Raising Standards” conference in November 2016 and repeated at the ICE Gaming Expo in February 2017, when the Commission also stressed that:


• operators’ duty to treat consumers fairly will be an important theme for the Commission; • advertising and marketing are among the top areas for consumer concern in relation to the gambling industry and are a key part of the fair treatment of consumers;


• the Commission was determined to use all its enforcement powers to drive a culture where the operator must put consumers first and create credible deterrents; and • penalties are likely to be higher, particularly where the Commission finds systematic and repeated failings.


These themes were confirmed again on 6 July 2017 when the Commission published its revised enforcement strategy. The key take-aways are: • operators must put the consumer first; • there will no longer be a bias in favour of settlement, so licence reviews are more likely; and • financial penalties will be increased, particularly for repeated non-compliance.

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