The UK Government recently published the response to its Online Advertising Programme (“OAP”) consultation, which will have consequences for gambling advertisers including marketing affiliates, and the publishers and platforms with which they work.
To recap, the OAP was set up with the aim of supporting sustainable growth for the advertising industry, while also building a fit-for-purpose framework that would protect consumers against harmful (paid-for) content posted online.
Following a call for evidence, the Government concluded that:
“It is clear from the responses we received that increasing trust in online advertising is vital for the growth of the sector. However, the scale and speed of development in this field has presented a number of challenges. A lack of transparency and accountability in the supply chain, combined with misaligned incentives, has led to insufficient action to address illegal harms associated with online advertising – negatively impacting consumer trust. More must be done, both by the government and by those across the whole advertising supply chain, to prevent bad actors using online advertising as a method of reaching victims, and therefore to support the success of this important industry.”
Accordingly, the Government has announced new rules to require platforms (including social media platforms), intermediaries (including marketing affiliates) and publishers (including apps and websites) to more proactively tackle illegal advertising and protect under-18s from age-restricted adverts. These duties shall apply across all sectors, which includes the gambling sector.
The measures are designed to complement a package of other reforms, such as the Online Safety Bill.
What was the purpose of the OAP consultation?
The public consultation, which was mentioned in Chapter 2 of the Gambling White Paper, was a programme through which the Government sought to address paid-for advertising and marketing issues that are common in all industries including gambling.
Taxonomy of harms
The consultation proposed a “taxonomy of harms” which set out a spectrum of harmful online content and placement considered to be “caused by or exacerbated through online advertising”. The taxonomy of harms, which included 12 types of consumer harms and three types of industry harms, was designed to be used as the framework and basis for determining potential action under the OAP.
The OAP consultation went on to propose three core options for reforming the online advertising environment, along with other supplementary measures which could build on the current codes for advertisers.
Proposals/options in the OAP consultation
- Self-regulatory approach
- Introduce a statutory regulator to backstop more fully the self-regulatory approach
- Full statutory approach
Responses to the OAP consultation
115 submissions were received. Respondents ranged from market participants engaged across various stages of the online advertising supply chain, stakeholders working in competing or complementary markets, and consumer groups. Respondents with an interest in the gambling industry included the Betting and Gaming Council (“BGC”), bet365, Gambling Related Harm All Party Parliamentary Group and Peers for Gambling Reform.
There were various interlocking themes within the responses. We shall focus on one relevant theme from each Part:
- Part 1, Scope of the OAP: The need to ensure that the scope of online advertising and actors is defined in a way that “avoid new or novel categories of advertising falling through regulatory gaps.”
- Part 2, Harms caused by online advertising: There are several issues concerning fraudulent adverts which ought to be addressed, including the thorny area of advertising around cryptoassets. For more discussion regarding cryptoassets in the context of gambling, please see our recent White Paper Series article.
- Part 3, Regulatory framework: Many felt that neither the current self-regulatory regime, nor the existing industry initiatives, are effective in addressing the taxonomy of harms. In particular, the Advertising Standards Authority (the “ASA”) was described as “lack transparency and accountability”. 25% to 33% of respondents supported full statutory regulation across the supply chain.
- Part 4, Decisions on regulatory reform: There was a considerable level of support for several measures in the consultation. Responses in relation to transparency measures mostly focused on record keeping, with some emphasising that a proportionate approach would be appropriate. Responses in relation to accountability measures were wider-ranging and more varied.
Additionally, the responses suggested a range of industry initiatives for consideration, for example:
- The Internet Advertising Bureau (IAB) UK initiatives, including Gold Standard and Ad Verification Guidelines;
- Branded Content Marketing Association’s Influencer Marketing Best Practice Guidance;
- Influencer-related initiatives noted by the Influencer Marketing Trade Body;
- Gambling awareness tools;
- Market-based artificial intelligence (AI) tools.
Actions from the Government
After considering the responses, the Government concluded that the current self-regulatory framework is not appropriate to combat the taxonomy of harms identified in the OAP consultation. As such, the Government pledged to introduce a targeted package of measures designed to:
- tackle illegal advertising – such as fraud and scams, the spread of malware, and adverts for illegal products and services. These harms are generally perpetrated by bad/illegitimate actors using advertising to undertake criminal activity; and
- increase protections for children and young people against adverts for products and services that are illegal to be sold to them – including gambling, alcohol, vapes and other age-gated products and services.
To achieve these aims, the Government plans to introduce a new regulatory framework for online advertising. The framework will statutorily regulate parties in the online advertising supply chain that are not currently regulated. This includes platforms (including social media platforms), intermediaries (including marketing affiliates) and publishers (including apps and websites). For the avoidance of any doubt, advertisers (e.g. gambling operators) are excluded from the new measures because they are already held accountable under the current self-regulatory advertising and marketing framework policed by the ASA.
The Government will expect platforms, intermediaries and publishers to apply mitigative measures which:
- make it more difficult for bad actors to access and abuse the online advertising environment (this would include black market (unlicensed) gambling operators);
- detect and mitigate unlawful adverts quickly; and
- increase cyber resilience.
Further, the Government will require platforms, intermediaries and publishers to use systems which proportionately prevent children and young people from seeing illegal adverts. There will be a focus on the control that a party can exercise over the content and placement of adverts, as well as their size and reach.
The BGC has responded by confirming that it supports the Government’s new rules and stronger sanctions to tackle illegal adverts.
The Government shall be forming a Ministerial-led taskforce in the coming months to undertake non-legislative action. This will involve asking industry to cooperate with the Government by improving the evidence base on the scale of threat and impact of illegal harms and building on existing voluntary initiatives focused on tackling drivers of illegal harms.
The Government will also shortly be launching a further consultation on the mechanics of potential legislation, including its preferred choice for a regulator to oversee the new rules.
Finally, when parliamentary time allows, the Government intends to bring forward legislation to achieve the aims explored above.
Harris Hagan insight
Although it is already an offence under the Gambling Act 2005 (the “2005 Act”) to advertise unlawful gambling and, in this context, advertising is widely defined so it could encompass platforms, intermediaries and publishers – the OAP is a welcome development in the gambling sphere. If properly implemented, the Government’s plans to make platforms, intermediaries, and publishers more accountable for harmful content should help to reduce consumer exposure to black market (unlicensed) gambling online.
The fact that more participants in the advertising supply chain will be required to use systems to proportionately prevent harmful content reaching children and young people is more positive news for the industry. After all, it is often the platforms and publishers that hold the power to properly target gambling advertisements. However, in Great Britain, it is the gambling operator that bears the most risk (both in terms of risking sanction by the Gambling Commission and committing an offence under the 2005 Act) in the event that their services are inadvertently advertised to those aged under 18.
With that said, this is but the first step for the OAP and it remains to be seen how the Government’s proposals will be implemented. We urge interested parties to participate, where possible, in discussions with the Government to help shape the OAP over the coming months.
Please get in touch with us if you would like to discuss the OAP further or if you would like assistance on any other advertising-related matters.
With credit and sincere thanks to Gemma Boore for her invaluable co-authorship.