The heavy cost of misleading advertising

The heavy cost of misleading advertising

British pound coins on a background of money.

by Bahar Alaeddini, Partner

by Bahar Alaeddini, Partner

On 2 May, the Gambling Commission published its decision following a review of BGO Entertainment Limited’s (“BGO”) remote operating licence. The licence review related to breaches of licence conditions relating to marketing and advertising and BGO was fined £300,000, the first financial penalty imposed by the Commission for advertising failings. This is a landmark decision, demonstrating the Commission’s further strengthening of its focus on consumer protection.

The concerns about BGO’s advertising related to the failure to include significant limitations and qualifications relating to promotions, meaning that adverts were potentially misleading to consumers. These concerns were first raised by the Commission in July 2015 but BGO failed to take prompt and effective action to address the issues, despite providing assurances that it understood the requirements and had taken action to ensure they were met. The Commission continued to find evidence of advertisements on BGO’s own website and third party affiliate websites that were potentially misleading by failing to include significant limitations and qualifications of promotions.

Perhaps of more concern is that the Commission found that BGO acted in a way that cast doubt on its suitability to carry on licensable activities because it failed to:

• take timely and effective action to address the LCCP breaches; and
• provided inaccurate assurances that the problems had been addressed.

The findings against BGO emphasise the importance of:

• understanding and applying the rules relating to advertising, as set out in the LCCP, the CAP/BCAP Codes and the associated guidance on the rules for gambling advertisements;
• taking responsibility for the actions of third parties such as affiliates, by making sure that marketing material they use is not misleading;
• always working with the Commission in an open and transparent way; and
• coming forward and making full disclosure of all the relevant facts relating to an investigation, at as early a stage as possible, to achieve compliance without a regulatory review.