The Gambling Commission has slapped its first advertising-related fine against an online gambling operator for advertising that was deemed to fall foul of social responsibility rules and come to a settlement with another operator.
It imposed a £300,000 penalty on BGO Entertainment Ltd for “misleading advertising on its own and its affiliates’ websites” and more recently required Lottoland to pay £150,000 to a socially responsible cause for not making it clear to customers that they were betting on the outcome of a lottery draw rather than taking part in a lottery.
The Commission started looking into BGO’s marketing after May 2015, when the new social responsibility code provision 5.1.17 relating to marketing and advertising was drafted into the Licence and Code of Practice Conditions (LCCP). This provision requires all licensed gambling operators to include in their advertisements any significant limitations relating to promotions to avoid misleading consumers.
The Commission found that 21 adverts were in breach of the social responsibility codes, nine of which were on BGO’s website and 14 on BGO’s third party affiliate websites. Interestingly, whilst the Commission notified BGO of its malpractice, the regulator took more issue with the fact that BGO “failed to take prompt and effective action” soon after being told of its shortcomings: BGO “repeatedly” informed the Commission that it understood its obligations yet failed to put those assurances into action and continued to misbehave. Further, BGO said in 2016 that it would comply with the Committee of Advertising Practice (CAP) code by providing a “Copy Advice Audit” of its website to give the Commission further reassurance. Yet again, BGO failed to do so.
As a result, the Commission had little sympathy with the operator. In addition to the £300,000 fine, the Commission also gave BGO a formal warning under section 117(1) of the Gambling Act 2005, which will remain on file and be taken into account if the Commission detects further regulatory breaches.
The Commission, on the back of an upheld Advertising Standards Authority (ASA) complaint, forced Lottoland to pay £150,000 to a socially responsible cause. The ASA considered a complaint about Lottoland’s advertising, which it upheld on 1 February 2017. The ASA deemed the advertising misleading because it implied participants would be taking part in a lottery as opposed to a gambling game. Lottoland failed to make this clear on its website, social media and in its third party marketing.
In reaching that decision, the Gambling Commission Programme Director for Enforcement and Intelligence, Richard Watson, commented: “In this case the operator used ambiguous terminology in their marketing and advertising, which was misleading. That is not acceptable and the £150,000 penalty package reflects the seriousness of Lottoland’s failures. We expect all operators will learn the lessons from this case and take action to ensure that their consumers are clear about what they are being offered.” Like BGO, Lottoland was in breach of the LCCP (although different provision, SR code provision 220.127.116.11). However, in contrast to BGO, Lottoland accepted its failings and settled on the basis that it would: 1) agree to publish a statement outlining its shortcomings; 2) pay £150,000 to a sociable cause rather than pay a fine; and 3) contribute to the Commission’s investigation costs.
Salutary lesson to operators
The Commission is working closely with the ASA to ensure better practice and has urged licensees to read the decision notice and the public statement to ensure operators’ marketing and advertising practices are complying with the social responsibility rules. Both decisions serve as warnings to operators that regulators, including the Commission and the ASA, are serious about consumer protection.