01Sep

Advertise with caution: ASA shine AI-fuelled torch on foul play

1st September 2023 Gemma Boore 180

Traditionally, the Advertising Standards Authority (“ASA”) have relied on “limited, labour-intensive manual searches and complaints from the public” to monitor and regulate the online advertising environment. However, since 2021, they have been “investing in data science capabilities and building a team to help take on the specific challenges of regulating online advertising”.

As a result, one of the newer weapons in the ASA’s armoury is its Active Ad Monitoring system (“the AAM System”). The AAM System, which processes more than 100,000 adverts per month, uses artificial intelligence (“AI”) to proactively search for online adverts that might breach the UK Advertising Codes. Specifically, the AAM System deploys “machine learning algorithms to identify and flag likely non-compliant adverts”, following which ASA experts can manually review and take any necessary action. The process is helpfully explained in the ASA’s graphic below:

The ASA’s commitment to use technology, such as AI, to detect and enforce more effectively aligns with the approach being taken by other authorities. For example, it was recently revealed that the police force in Devon and Cornwall detected almost 300 drivers breaking the law in three days using AI – and it appears a similar (although perhaps not quite so extreme) increase in enforcement activity is coming to fruition at the ASA.

Over the course of 14 days in August 2023, the ASA published three rulings relating to gambling adverts that potentially breached the ASA’s ‘strong appeal’ tests. The strong appeal tests effectively prohibit content (including imagery, themes etc.) that has a strong level of appeal to under-18s in gambling adverts; regardless of how the content is viewed by adults.

In each case, the adverts in question were identified for investigation following intelligence gathered by the AAM System.

We discuss the recent rulings and provide our insights below.

Novak Djokovic, Rafael Nadal, Nick Kyrgios and Stefanos Tsitsipas – of strong appeal

The adverts

This ruling concerned four promoted tennis-related tweets, featuring tennis players Novak Djokovic, Rafael Nadal, Nick Kyrgios and Stefanos Tsitsipas. Two of the tweets celebrated Djokovic’s impressive run of form, while the other two were polls which asked users to vote on tennis-related questions during the Australian Open.

The ASA’s assessment

The following factors were considered:

Djokovic, Nadal, Kyrgios and Tsitsipas had all appeared in a Grand Slam final in the previous year;
Djokovic and Nadal have each recently been ranked as the world’s number one player and had the joint record for the most Grand Slam titles won;
Kyrgios reached the Wimbledon final in 2022 and Tsitsipas reached the Australian Open final in 2023; both finals attracted large media coverage and would have been of interest to under-18s.

All four were therefore ‘star’ players with a high profile and would be considered high risk according to the ASA’s guidance on the strong appeal tests.

In its defence, the advertiser pointed out that:

most of the players’ social media followers were over 18 and that the players’ commercial partnerships were with adult-oriented brands; and
they understood that Twitter users self-verified their age, and because that was not always accurate, they had added an additional level of assurance by targeting the ads on social media to only reach over-25s.

Having considered the facts, the ASA determined that all four players were likely to be of strong appeal to under-18s. The regulator went on to note that it would have been acceptable for the ads to appear in a medium where under-18s could entirely be excluded from the audience for all intents and purposes. However, that would only apply in circumstances where those who saw the ads had been robustly age-verified as being 18 or over, and it did not consider that the methods in question (i.e. self-verification by Twitter users coupled with behavioural targeting) met that threshold.

Accordingly, the ASA determined that the adverts breached CAP Code (Edition 12) 16.1, 16.3 and 16.3.12 (Gambling) because they used people who strongly appeal to those under-18 years of age when under-18s could not entirely be excluded from the audience.

Granit Xhaka – of strong appeal

The advert

This ruling related to a tweet published on Twitter in February 2023 featuring the text: “Granit Xhaka pulled out this stunning finish last season in Arsenal vs Man United”. The tweet contained an embedded video which opened with a footballer kicking a ball from the corner. As he did so, a green digital circle appeared around him. As the ball travelled, a green triangle appeared where the ball had been kicked and the gambling operator’s logo appeared. The video then cut to footage from a football match between Arsenal and Manchester United and showed Xhaka scoring a goal as the crowd cheered. The score of the match then appeared overlayed onto the video.

The ASA’s assessment

The following factors were considered:

Even though the original tweet was not published by a gambling operator, it was promoted by an operator using the Twitter Amplify feature and as such, the tweet was considered by the ASA to be an advert for that operator.
Football is an activity that is highly popular amongst under-18s in terms of participation and viewership, there is sophisticated infrastructure around organised participation in football, and it has an exceptionally high media profile (including dedicated media for under-18s). Hence, those who play football at an elite level are likely to appeal strongly to under-18s.
At the time the advert was seen, Xhaka was a player for Arsenal Football Club. Xhaka is therefore well-known to Arsenal fans and other football fans more widely. Xhaka is also well-known for being the captain of the Swiss national team.
Although the tweet was only promoted to users over 25 years of age, under-18s could not entirely be excluded from the audience due to the lack of robust age-verification controls/measures on Twitter.

Accordingly, the ASA determined that the advert breached the CAP Code (Edition 12) 16.1., 16.3 and 16.3.12 (Gambling) because it featured an individual who strongly appeals to under-18s, and under-18s could not in practice entirely be excluded from the audience.

Robbie Savage – not of strong appeal

The advert

This ruling concerned a promoted tweet which stated: “ No matter who the manager is Leeds are going down. @RobbieSavage thinks it’ll be too little, too late at Elland Road…”. The tweet contained an embedded video clip that featured Savage discussing Leeds United’s relegation prospects. The video featured the gambling operator’s logo intermittently and the BeGambleAware logo. Text at the end stated, “It’s who you play with.”.

The ASA’s assessment

The following factors were considered:

The advert appeared in a medium where under-18s could not entirely be excluded from the audience, so the age verification ‘safety net’ could not be used as a defence if the advert was found to be of strong appeal to under-18s.
Savage had played for several Premier League teams and at an international level for Wales. However, he had not been a Premier League player for 15 years, and his Wales career ended four years before that, so he is now more associated with punditry/the media.
Savage’s punditry and other media appearances were primarily aimed at adult audiences e.g. tactics, team performance, financial and strategic issues etc. This is supported by audience data.
Savage appeared as a contestant in Strictly Come Dancing in 2011, which was sufficiently long ago not to be relevant to the current generation of under-18s.
Savage’s social media profile was unlikely to make him strongly appeal to under-18s, with only 8,810 social media followers aged under-18 collectively across Instagram, Facebook, and Twitter.

Taking this into account, the ASA ruled that the advert was not likely to be of strong appeal to under-18s, and did not therefore breach the CAP Code.

Harris Hagan insight

Below are our key takeaways from the recent rulings:

Age verification must be robust – do not rely on Twitter. It now appears to be a settled position that if operators wish to rely on the defence that the advertisement is not accessible to under-18s, there also needs to be a backstop of robust age verification controls in place. Self-verification by users and behavioural targeting are not sufficient.
The gambling operator is the most likely party to face the music. The Xhaka ruling demonstrates that the mere promotion of someone else’s tweet by a gambling operator may be sufficient for the tweet to be deemed an advert by the operator themselves. Operators should therefore exercise caution when using promotional tools on social media platforms, such as Twitter Amplify. As a rule of thumb, the same consideration should be given to third party promoted tweets as those that are self-published. It also notable that, although they were approached for comment, the ASA did not bring any action against the original publisher of the Xhaka tweet.
Football pundits could be fair game. The fact an individual is a current (or recent) football pundit does not automatically mean they are of strong appeal to under-18s. Consideration should be taken of the individual’s overall appeal to under-18s, including the time that has elapsed since they were an active football player or coach (if applicable), the team(s) with which they were associated, and any other recent appearances on television and other media.
Celebrities with ‘some’ under-18 followers need not be ruled out. It is notable that Savage’s social media following across three platforms included approximately 8,810 followers aged under 18. Clearly this number does not take duplicates (i.e. followers on two or more social media platforms) into account. However, it is still interesting that the ASA did not consider that this suggested a strong appeal to under-18s. We have yet to find out what number will tip the scales in this scenario – would 20,000, 50,000, 100,000 or even 1,000,000 followers have resulted in a different outcome? We can but wait and see where the threshold lies but, in the meantime, advertisers can take some comfort that for now, there is a precedent that (just) 1,000s of under-18 followers is a relatively safe bet.
More ASA enforcement activity will come. Based on the recent spike in enforcement activity (three rulings in 14 days), we think it is fair to suggest that the ASA’s enhanced monitoring capabilities will increase the frequency and saturation of rulings, particularly in relation to relatively new rules such as the strong appeal tests, which are – to some degree – open to interpretation. But could the increase in surveillance activity inadvertently lead to over-interference, despite that not necessarily being the ASA’s intention? We, for one, will be interested to see whether the ASA’s current trajectory of enforcement activity in the gambling sector will continue.

Next steps

If you would like more information on the strong appeal tests and the associated guidance published by the ASA, please refer to our previous article: Getting it right: how to comply with the “strong appeal” test when using sports personalities to advertise sports betting.

Otherwise, please get in touch with us if you would like to discuss the strong appeal tests further, or if you would like our assistance training your marketing teams to advertise your brand in a compliant, yet commercially viable, manner.

With credit and sincere thanks to Adam Russell for his invaluable research and co-authorship.

18Aug

Online Advertising Programme Consultation: Impacts for the gambling industry

18th August 2023 Adam Russell 188

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.

Key themes

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.

Next steps

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.

05Jul

White Paper Series: Gambling sponsorship of sport – a modern endemic or just the weapon du jour in political warfare?

5th July 2023 Chris Biggs 198

Twenty years after the first partnership between a Premier League football team and a gambling company, the Premier League clubs released a statement on 13 April 2023 confirming that they had “collectively agreed to withdraw gambling sponsorship from the front of clubs’ matchday shirts…” with the aim to reduce the prominence of gambling sponsorship in the Premier League from the end of the 2025/26 season (the “Voluntary Ban”).

Two weeks later, the UK Government released its White Paper High stakes: gambling reform for the digital age, in which the Government commended the Voluntary Ban and also endorsed the creation of a new cross-sport gambling sponsorship code (the “Sponsorship Code of Conduct”) to ensure sponsorship deals are socially responsible.

Critically, however, the White Paper did not – despite calls to the contrary from anti-gambling campaigners – ban gambling sponsorship of sports. For many, this raised eyebrows and prompted the question: did the Premier League and the Government go far enough?

Some say not. Indeed, in the most recent survey by the Football Supporters Association (the “FSA”), 73.1% (nearly three quarters) of respondents agreed with the statement:

“I am concerned about the amount of gambling advertising and sponsorship in football.”

In this White Paper Series blog, we delve deeper into the Voluntary Ban and the Sponsorship Code of Conduct and consider the effectiveness of these methods of self-regulation.

1. Background

The liberalisation of gambling advertising was one of the major changes introduced by the Gambling Act 2005 (the “2005 Act”). Before the 2005 Act, only bingo and lotteries were permitted to advertise on television. Since then the landscape has shifted significantly and gambling marketing, including by means of sponsorship, has become both highly visible and lucrative. Gambling brands provided 12% of sports sponsorship revenue according to a 2019 estimate.

Aside from horse racing and greyhound racing, which have integral links to betting, gambling sponsors are most strongly present in top-tier football, where 8 out of 20 Premier League teams in the 2022/23 season had a front-of-shirt gambling sponsor and all teams had an ‘official betting partner’. In smaller sports such as darts and snooker, a substantial amount of sponsorship revenue also comes from gambling operators.

Potentially as a result of its visibility and the associated revenue, the questions on sponsorship in the call for evidence published by the Government in preparation for its production of the White Paper attracted a high number of responses, with strongly polarised views. Industry stakeholders (as well as representatives of sectors that benefit from gambling advertising, such as broadcasters and sports governing bodies) broadly took the view that the current regulatory regime was fit for purpose. These respondents also emphasised the contributions that gambling revenue makes to other sectors.

In contrast, many other respondents (particularly across the health, charity and academic sectors) argued that gambling advertising was in need of significant reform, with several stakeholders in this group advocating a complete sponsorship ban. Many of these responses expressed concern regarding the link between sports and gambling and a common theme was the need for a ‘precautionary’ approach to the regulation of advertising, arguing that the absence of evidence of harm must not be treated as evidence of an absence of harm.

In the end, the Government concluded that although the limited high‑quality evidence they received on sport sponsorship indicated that it does have a level of impact on gambling behaviour, this was not as marked as for other forms of marketing (such as seeing gambling advertising online or receiving direct marketing) and it was these latter advertising mediums that should be subject to reform following consultation – and we will discuss the proposed reforms in these areas in a later blog.

Returning to sports sponsorship, the White Paper commended the steps taken voluntarily by the industry and other regulators to date, including the Voluntary Ban, sports governing bodies’ agreement to adopt the Sponsorship Code of Conduct and the introduction of the strong appeal test by the Advertising Standards Authority (the “ASA”); as well as the ASA’s recent high profile enforcement action in relation to the strong appeal test (which we have previously discussed) – but did not recommend the introduction of any more draconian measures to curb the prevalence of gambling sponsorship of sports.

The Voluntary Ban and the Sponsorship Code of Conduct appear therefore to have been well-timed pre-emptive strikes for self-regulation, but will they go far enough?

2. Voluntary Ban – the toothless tiger?

It is without doubt that the Voluntary Ban is a positive step in the right direction by the Premier League. The reduction of children’s exposure to gambling by way of sponsorship, advertising or otherwise is, as the Secretary of State Lucy Frazer noted in her speech to Parliament unveiling the White Paper, a key motivation of both sides of Parliament and the industry as a whole:

“We must do more, which is why we are taking steps to make gambling illegal, in many forms, for under-18s. I welcome the Premier League’s announcement on banning gambling advertising from the front of shirts. Footballers are role models for our children, and we do not want young people to advertise gambling on the front of their shirts…”

The Government’s decision not to recommend further measures to reduce gambling sponsorship of sports (and specifically, football) has not, however, come without scepticism. During the unveiling of the White Paper, several members of Parliament questioned the effectiveness of the Voluntary Ban and criticised the Government’s decision not to take further action. Below we consider some of these arguments and ask whether the Voluntary Ban has actually gone far enough.

First and foremost, it is undeniable that the Voluntary Ban will, once it is implemented, be an important step in reducing the prevalence of gambling advertising to children, for example in football sticker albums that are directly marketed to children. However, the ban does not come into force until the end of the 2025/26 season (theoretically permitting three more football seasons and associated sticker collections with front of shirt sponsorship, at the time of writing) and even when it does come into force, the Voluntary Ban does not extend to the backs of matchday shirts nor other parts of the playing kit. Indeed, the sceptics amongst us will probably expect to see a sea of sleeves adorned with gambling logos in 2026/27.

The second point to note is that shirts (front or otherwise) really are the tip of the iceberg of gambling sponsorship. In the absence of significant reform (for example, in the Sponsorship Code of Conduct, discussed below), we can expect to continue to see gambling sponsorship on pitchside hoardings and structures within football stadiums that are visible to the crowd and/or those watching the match broadcast on television or online.

Thirdly, the Voluntary Ban applies to the Premier League only – lower divisions in the English Football League will be free to continue to accept sponsorship, including on the fronts of shirts – from gambling operators if they choose.

The final argument raised during the Parliamentary debate was that, without a firm stance from the Government, the Premier League could change its tune and reduce the extent of the Voluntary Ban or reverse it entirely. This is of course, an inherent risk of advocating reform by means of self-regulation by an industry – the industry retains control but this risk is countered by the fact that self-regulation is invariably the quickest method to achieve change. During the debate, the Government countered the possibility that the Premier League would subsequently change its position with the reassurance that it “made position very clear to the Premier League” regarding the action it ought to be taking, and it will take any further steps as necessary in the event of further research into the issue.

3. Make the code, not war

In comparison, the Sponsorship Code of Conduct remained largely outside the focus of the Parliamentary debate surrounding the White Paper’s publication.

This may be because the White Paper is rather vague on the scope of the Sponsorship Code of Conduct. Although it recommends that the new code will be common to “all sports” apart from greyhound and horseracing, we do not yet know what this will mean in practice. Will motorsports or esports be included, for example? Instead, the White Paper simply states that:

“Sports bodies need to ensure a responsible approach is taken to gambling sponsorship through the adoption of a Code of Conduct which will be common to all sports. For individual sports we believe that sports governing bodies are best placed to drive up standards in gambling sponsorship, recognising their specific context and responsibility to their fans. We welcome the work that is underway through sports governing bodies to develop a gambling sponsorship Code of Conduct, and will continue to support its development and implementation across the whole sporting sector…
…The measures included in a sponsorship Code need to be robust enough to provide meaningful improvements in the social responsibility of gambling sponsorships, while giving flexibility to accommodate the material differences between sports.”

The Government goes on to set out some possible principles to be included in the Sponsorship Code of Conduct:

Until we see the draft Sponsorship Code of Conduct, we will not know what impact, if any, it will have on current sponsorship arrangements. Certainly, a couple of the principles suggested in the White Paper appear to go no further than current requirements. By way of example:

(a) it is an offence under the 2005 Act to advertise unlawful gambling, including by means of sponsorship arrangements, and this offence carries a maximum sentence of imprisonment for a term not exceeding 51 weeks and a maximum fine of £5,000 (at the time of writing). If the possibility of committing a criminal offence is not a deterrent against accepting sponsorship from a gambling operator that is not appropriately authorised by a Gambling Commission licence, a commitment to a sports governing body under a voluntary Code of Conduct is unlikely to carry much additional weight; and

(b) operators are already required to follow relevant industry codes on advertising, notably the Industry Code for Socially Responsible Advertising, which provides that:

“advertising of adult-only gambling product suppliers should never be targeted at children….and this Industry Code continues to require that gambling operators do not allow their logos or other promotional material to appear on any commercial merchandising which is designed for use by children. A clear example of this would be the use of logos on children’s sports’ shirts.”

Lastly, it is currently unclear when the Sponsorship Code of Conduct will (1) be published; and (2) come into force. In terms of a timeline, the White Paper simply states that the Government will:

“work with sports bodies to refine the code over the coming months.”

Given the Government’s repeated promises that the White Paper (which took nearly 30 months to be published following the call for evidence) would be published in “the coming weeks”, many will be wary regarding this statement and likely, rightly so. Not only has the Government committed itself to maintain involvement in the process of agreeing the Sponsorship Code of Conduct (which may slow it down) but the new code must also be reviewed, approved and adopted by governing bodies across “all sports”. We for one, do not envy the person responsible for overseeing such a mammoth task.

4. Our final thoughts…for now

Ultimately, we have again been delivered the message to “hurry up and wait” by the White Paper. Until the Voluntary Ban comes into force and the Sponsorship of Code of Conduct is adopted across all sports (whenever that might be), it is likely that gambling sponsorship will continue to be the subject of keen debate in the press, politics and beyond. Indeed, in recent weeks, several Premier League Clubs have been caught in the crossfire and criticised for continuing to accept front of shirt sponsorship from gambling operators, even though the Voluntary Ban does not come into force until 2025/26.

When it does come in, there are also concerns that the Voluntary Ban may not significantly reduce the visibility of gambling brands in major sports – but is this really the issue that the press and politicians are making of it? Some may argue that gambling sponsorship is simply the weapon du jour in the ongoing political warfare surrounding gambling. The White Paper, which sought to be evidence-based, concluded that the limited evidence on gambling sponsorship considered by the Government revealed that sponsorship has a limited effect on gambling behaviour. So, does it really need to be curbed and if it does, what will be the real financial impact of this on sports clubs, some of which currently derive a significant proportion of revenue from gambling sponsorship?

In our view, the key question will be whether the Sponsorship Code of Conduct can find the balance that the White Paper, and most of the industry, seeks. If it is well-considered and efficiently implemented, the Sponsorship Code of Conduct may yet prove itself to be an example of effective self-regulation. But to achieve this, sports governing bodies must strike a balance between (a) reducing the commercial practices that unduly increase the risk of exposure of gambling to children on the one hand, and (b) on the other, permitting gambling sponsorship – along with the financial injection that it brings – safely for the benefit of all levels of sport.

With credit and sincere thanks to Gemma Boore for her invaluable co-authorship.

A recent study by Djohari et al. (2021) on the visibility of gambling sponsorship in football related products marketed directly to children revealed that gambling logos were visible, largely on the front of the shirts, in 42% of the stickers 2020 Panini Premier League sticker album.

28Feb

Chambers Global 2022 – Four Lawyers Ranked

28th February 2022 Ting Fung 212

Harris Hagan continues to have four lawyers individually ranked for Chambers & Partners’ Global Market Leaders Rankings (Gaming & Gambling).

As always, we are proud to have the quality of our work in the gambling industry recognised by the prestigious legal directories and will always strive for the highest standards.

Julian Harris (Band 1), was recognised as one of the leading gaming specialists in the UK and venerated for his “considerable experience advising on multi-jurisdictional gaming and gambling matters.”

John Hagan (Band 1), was recognised as having “significant expertise” advising “leading gaming and gambling clients on complex regulatory matters”, for which market sources have praised him as being “absolutely excellent”.

Bahar Alaeddini (Band 2) has been exalted for her “considerable strength” advising clients on a broad spectrum of regulatory and licensing complexities.

Last but certainly not least, Hilary Stewart-Jones occupies the esteemed position of Senior Statesperson. Commentary has emphasised her status as being both “well-respected” and “international”, with wide-ranging transactional and regulatory experience.

13Oct

KnowNow Digital Conference: Responsible Marketing for Gambling Operators 2020

13th October 2020 Ting Fung 342

Harris Hagan is pleased to join KnowNow again, this time for its second annual Responsible Marketing for Gambling Operators 2020 conference. The digital conference will take place on 15 and 16 October 2020. The focus of the sessions on the first day are on research and regulation, whilst the second day will address digital marketing best practice and protecting the young and vulnerable.

KnowNow has stated:

“This two-day event is a must for anyone interested in sustainable, responsible marketing practices. It is designed to bridge the gap between commercial considerations and operating within a player protection culture.”

Bahar Alaeddini will be moderating a panel debate, What does the future look like for affiliate marketing? How will an affiliate licensing system work and what do we do about the link between affiliates and the black market? on 16 October 2020, from 11.30 – 12.30pm. She will be joined by:

Tom Galanis, Founder and Principal of TAG Media
Clive Hawkswood, Chairman of Responsible Affiliates in Gambling
Brean Wilkinson, Product Advisor at Rightlander

Keynotes will also be provided by Ian Angus (Director of Policy of the Gambling Commission) and Brigid Simmons (Chairman of the Betting and Gaming Council).

With an estimated £200 million spent on TV advertising and £1 billion online by betting companies, the conference aims to provide attendees with guidance and food for thought on how to navigate the regulatory requirements.

Harris Hagan and KnowNow look forward to welcoming you to participate in this timely and important discussion. Register here for your two day digital pass.

20Jul

Gambling Commission Consultation on High Value Customers

20th July 2020 Julian Harris 316

Introduction

Following a breakfast briefing conducted by Neil McArthur in October 2019, the Gambling Commission announced the formation of three industry working groups, one of which was to focus on high value customer incentives.

The proposals from the working groups, co-ordinated by the Betting and Gaming Council (BGC), was published on 1 April 2020 with operators agreeing to implement the changes rapidly, some by as soon as 14 April. At the time of publication of the proposals the Gambling Commission stated that it “would launch formal consultations to ensure that the new measures are incorporated into its regulatory framework.” The Gambling Commission further stated that it “expects the industry to implement its code as soon as possible and considers most measures should be implemented within 3 months” and that it “will monitor and support implementation of the industry’s code as an interim measure.”

The proposals made were to:

Restrict and prevent customers under 25 years of age from being recruited to high value customer schemes.
All customers must first pass through checks relating to spend, safe gambling and enhanced due diligence before becoming eligible for high value customer incentives.
Reward programmes will also be required to have full audit trails detailing decision making with specified senior oversight and accountability.

The consultation was published on 26 June 2020 and closes on 14 August 2020.

New Licence Condition

The Gambling Commission proposes to introduce a new licence condition on rewards and bonuses. This will apply to all licences, except gaming machine technical and gambling software licences and will require that:-

any incentive or reward scheme must be designed to ensure that the circumstances and conditions are clearly set out and readily accessible to customers to whom it is offered;
neither the receipt nor the value is dependent on gambling for a pre-determined length of time or frequency, or alters or increases if the activity or spend is reached within a shorter time;
if the benefit comprises free or subsidised travel or accommodation the terms are not directly related to the level of gambling
if incentives or reward schemes are offered to customers designated “high value”, “VIP”, or equivalent, they must be offered in a manner consistent with the licensing objectives.

Most importantly, licensees are required – by use of the word “must” – take into account the Gambling Commission’s guidance on high value customer initiatives.

New Guidance

In its guidance, the Gambling Commission goes further than the three points that are outlined above. For example, in addition to those, it requires:-

Specific policies and procedures for the operation and governance of HVC schemes, to include authority levels for key decision making, and appropriate oversight arrangements.
A named individual, at senior executive level or equivalent, accountable for the programme’s compliance. Except for small scale operators this should be a PML holder.
Licensees should consider what additional steps are required to ensure staff are equipped and motivated to manage HVCs effectively, including enhanced training on safer gambling and AML risks specific to HVC management; job descriptions reflecting that protection of the licensing objectives are the basis for all activity carried out by staff involved with HVC rewards programmes; staff should not be incentivised or remunerated based on a customer’s loss, spend, or activity; the performance management of HVC staff should be consistent with the principle that commercial pressures should never override regulatory considerations or customer welfare; and ensuring staff managing multiple accounts retain their ability to assess risk on an individual basis.
HVC incentives should not be used to exploit vulnerable customers or to encourage problematic behaviour. Licensees must be able to evidence how their rewards and bonuses are compliant with the provisions in section 5.1 of the codes of practice.
Licensees will be expected to take all reasonable steps to verify the information provided to them and conduct ongoing checks, with frequency of checks to be determined by the assessment of risk from ongoing monitoring of the customer’s activity, behaviour and circumstances. In the absence of any change in the risk assessment, licensees should as a minimum undertake a review of a HVC’s account at least quarterly.

It is important to note the Gambling Commission’s statement at paragraph 1.5 of the proposed guidance: “We have used the word ‘must’ to denote a legal obligation, while the word ‘should’ is a recommendation of good practice, and is the standard that we expect licensees to adopt and evidence. We expect licensees to be able to explain the reasons for any departures from that standard.”

The Gambling Commission has consulted on these proposals, as it is required to do under section 24(10) of the Gambling Act 2005, before issuing or amending a code of practice. However, the addition of lengthy and detailed guidance bears resemblance to the approach the Gambling Commission has taken to customer interaction. The VIP guidance makes it explicitly clear from the wording above that, despite using the word “should”, it expects licensees to adopt the standards set out and maintain evidence of doing so. This is essentially a requirement. The manner by which the guidance has been issued, arguably opens the door to the Commission taking similar steps to that which it took in relation to customer interaction, this time in relation to the requirements for VIP customers. Essentially the Gambling Commission will be able to amend this guidance, perhaps substantially, and to add onerous additional requirements, without consultation. Whether they will do so remains to be seen, but we highlight the point as a warning to operators to be watchful. The guidance is detailed, and as we know, the devil lurks in the detail.

We recommend to operators that they reply to the consultation, seek clarity as to paragraph 1.5, and make it clear that they expect the Gambling Commission to consult prior to amending its guidance further.

With thanks to my colleague David Whyte for his invaluable co-authorship.

01Jun

Gambling updates from the Advertising Standards Authority; lockdown, eSports and children’s exposure to gambling adverts

1st June 2020 Jessica Wilson 338

The Advertising Standards Authority (“ASA”) has recently published guidance on advertising gambling amid lockdown, the marketing of eSports on social media, and a report on children’s exposure to gambling TV ads in 2019.

Gambling advertising during lockdown

As noted in our previous blog posts, the gambling industry is under a microscope during the current COVID-19 pandemic and has been subject to new expectations and guidance. Consideration must also be given to gambling advertising, and the ASA has published a “warning” to gambling operators to “pay even more attention to their responsibility under the Codes during these uncertain times”.

The CAP and BCAP advertising codes make it clear that marketing of gambling products must not be:

irresponsible in its use of content or themes that might exploit vulnerabilities; or
targeted through its content or placement at under-18s.

The global pandemic has created a new context of vulnerabilities and potentially heightened consumer risk to gambling-related harms. The ASA is therefore encouraging people to report gambling ads that:

refer to the COVID-19 crisis or related matters, such as the Government’s lockdown policy; and/or
include claims or themes that are of particular concern in the current climate (for example, ads that refer to relieving boredom, repeated play or personal problems like family difficulties).

The ASA appreciates that these are not new concerns but that they are exacerbated during the current circumstances. The ASA has further noted that it will “take swift action against ads that, in context of the present crisis, are likely to exploit people’s vulnerabilities or encourage irresponsible behaviour”.

Marketing eSports on social media

On 23 April 2020, the ASA published an advice note on the marketing of gambling on eSports on social media. The advice to licensed operators follows the ASA’s study on eSports betting marketing on social media and is to close any potential gaps between the relatively new concept of eSports and the existing CAP and BCAP codes. The advice applies to gambling marketing on all social media platforms, including Facebook, Instagram, Twitter, Snapchat, Twitch and TikTok.

The advice confirms that the CAP code rules that apply to the marketing of gambling on eSports:

are the same as those of traditional marketing on gambling; and
cover social media in the same way as they do all other non-broadcast media.

Whilst the rules are the same for eSports as for traditional marketing on gambling, the advice highlights CAP Code rules that are relevant to marketing eSports on social media, including:

Recognition of marketing: marketing communications must be obviously identifiable and must not falsely claim that the marketer is acting as a consumer, requiring social media marketing posts to be clearly labelled as such. For example, by using “#ad”.
Targeting: operators should take all reasonable steps to ensure advertising is not targeted at under-18s through the selection of media, or platform, or the ad’s content. For example, if gambling marketing can be searched for on a social media platform using terms that are likely to have particular appeal to children and there are no measures in place to protect children from seeing that marketing, then it is likely they will be breaking the CAP code targeting rules.
Appeal to under-18s: marketing must not be likely to be of particular appeal to children or young persons. For example, by using cartoons or by using a social media influencer who is associated with youth culture to promote eSports betting.
Terms and conditions: similar to the traditional marketing of gambling, the terms and conditions of offers of free bets should be made clear in gambling marketing on social media.
Affiliates and influencers: the advice provides a reminder that affiliates of gambling operators must also abide by the targeting and content rule and that gambling operators are responsible for the content produced for them on social media by influencers.

Children’s exposure to gambling adverts

On 22 May 2020, the ASA published a report titled Children’s exposure to age-restricted TV ads: 2019 update. The findings show that children’s exposure to gambling advertising has remained at a similar level over the last six years, since a peak in 2013. Since then, children’s exposure to TV gambling ads has decreased by just under half. Most of those adverts viewed by children were in relation to lottery, scratch cards and bingo.

05May

Keeping Affiliates in Line: “No Fudging”

5th May 2020 Lucy Paterson 354

Ensuring that operators have adequate oversight of their marketing affiliates has been on the Gambling Commission’s agenda for some time, but now appears to be under the spotlight once again. Historically, the Advertising Standards Agency (the “ASA”) and the Gambling Commission have not been shy to take action against operators who they consider have had inadequate oversight of their affiliates, and the current global crisis has again brought the issue to the fore, with concerns that affiliates have sought to exploit the situation for marketing purposes. Whilst the Gambling Commission has no jurisdiction over affiliates, the ASA (which does) has repeatedly ruled that:

both the operator and the affiliate are responsible and accountable for non-compliant advertising, even where the advertisement was the sole creation of the affiliate; and
operators cannot absolve themselves of responsibility for marketing communications where they ultimately reap the benefits.

In a recent message to the gambling industry in the light of the COVID-19 crisis, Neil McArthur emphasised the need for licensees to ensure that their affiliates are “conducting themselves properly” – or the Gambling Commission will not hesitate to take action. A similar message was delivered by his predecessor, Sarah Harrison, at WrB in February 2017, in which she said:

“…my message to is that they need to get their house in order. But far more importantly, my message to operators is there is no ‘fudge’ around this, no equivocation – the affiliates who promote your brand and who drive business to your websites are your responsibility, and it is you who are accountable.”

If you get a mention by the CEO of the Gambling Commission in a keynote address to the gambling industry, it is rarely good; it sets alarm bells ringing. Unfortunately, whilst some operators have improved practices, it seems those bells were not heard by many in 2017.

Unlicensed Third Parties

Affiliates are not licensed by the Gambling Commission although, arguably, they could be licensed under the existing legislation. Our view remains that it has no appetite for licensing affiliates, and it is much easier to hold a relatively small number of operators responsible.

As they are not licensed, affiliates are not bound by the Licence Conditions and Codes of Practice (“LCCP”), though they must comply with both the Code of Non-broadcast Advertising and Direct & Promotional Marketing (known as the CAP Code) and the Code of Broadcast Advertising (known as the BCAP Code) (the “Advertising Codes”).

Despite not being bound by the LCCP, in accordance with social responsibility code provision 1.1.2, licensees must:

ensure that the terms on which they contract with affiliates require affiliates to conduct themselves as though they were bound by the same licence conditions and codes of practice;
oblige affiliates to provide them with the information they need to comply with any reporting requirements; and
have the right to terminate in the event of breach or behaviour inconsistent with the licensing objectives.

There is no doubt that licensees are considered responsible for the actions of third parties with whom they contract, which includes affiliates. The buck very much stops with them. In response to the need for greater oversight and control over affiliates, practical challenges and regulatory risks, many affiliate marketing programmes have been drastically reduced and, in some cases, radically disbanded.

Industry Code for Affiliates

Following Neil McArthur’s CEO Breakfast Briefing on 2 October 2019, three Gambling Commission industry working groups were created, which included the Safer Advertising Online Working Group. We reported on recent updates on 2 April 2020, which included the adoption and implementation – by all affiliates – of a code of conduct. This will be updated and amended on a regular basis to ensure all measures undertaken by the industry will be implemented equally by affiliates. It is expected that this code of conduct will be in place by July 2020 and the Gambling Commission has made very clear that licensees will be “held to account for these commitments” from this date.

The industry code has not been published yet. Affiliates are strongly encouraged to engage with their licensed partners and the Responsible Affiliates in Gambling group, which is an independent body established in May 2019 and chaired by Clive Hawkswood (former CEO of the Remote Gambling Association), set up to help raise standards in the sector, particularly in respect of responsible gambling. Equally, licensees should engage with the Betting and Gaming Council and conduct a comprehensive review of its affiliate programme.

Considerations for Affiliates

Act as if you are licensed yourselves, only without the licence fees. If you do not, you do not have a future in the gambling industry.
Educate yourselves on the legal and regulatory requirements relating to gambling advertising.
The requirements are all readily available online with operators, regulators and, of course, lawyers eager to provide guidance.
Review your training requirements and deliver any additional training.
Make sure your advertisements are legal and not misleading (particularly regarding free bets and bonuses, by stating significant terms and conditions) and socially responsible.
Consider what safer gambling information you should provide.
Ensure you comply with any advertising codes in other countries that you may be advertising in.
Ask your licensed partners for assistance and how they are preparing to implement the new industry code. Some operators have existing marketing guides for their affiliates on the rules and regulations governing marketing in the jurisdictions in which they operate.

Considerations for Licensees

Ensure marketing carried out by affiliates is socially responsible and in compliance with the Advertising Codes.
Encourage affiliates to use the free and paid for copy advice service provided by CAP and the ASA.
Educate affiliates by providing detailed guidelines, including worked examples of compliance and non-compliance.
Review your marketing guidelines and rules, including your marketing approval process and the role of your marketing PML holder.
Review your policy, procedures and controls relating to affiliates, ensuring you have a comprehensive and robust audit approach. This should be led by your marketing PML.
Review your training requirements and deliver any additional training. This may include both employees and affiliates.
Review your affiliate agreements to ensure compliance with social responsibility code provision 1.1.2 (as detailed above), the LCCP, the Advertising Codes and your marketing guidelines and rules, and strengthen where required. By way of example:
- if affiliates can only use material that you have produced in-house, include a term that such material may not be amended; and
- if affiliates can modify or develop content, specify that approval is required before material is published.
Ensure you have adequate remedy in the event of breach such as inclusion of a term allowing you to withhold any revenue share.
Ensure you have the right to terminate easily and promptly in the event of breach or behaviour inconsistent with the licensing objectives.

Affiliates play a critical role for operators, generating traffic and revenues. In addition to recognising the value of affiliates, operators must acknowledge (if they have not already) that those same affiliates now also represent a genuine risk to their business and reputation. Ultimately, licences are a privilege not a right so ensure you have adequate measures in place to protect your licence!

If you would like to discuss any of these issues, including provision of training, please do get in touch with us.