June 27, 2017

The Gambling Commission  has today released the outcome of its investigation into EU Lotto Limited trading as Lottoland.co.uk (Lottoland).

Lottoland offer consumers the opportunity to bet on the result of official lottery draws. The Commission found that in doing so Lottoland has breached social responsibility code provisions 5.1.7 (Marketing of offers) and 1.1.2 (Responsibility of third parties) set out in the Licence Conditions and Codes of Practice (which can be found here). Lottoland accepts that the marketing communications highlighted were misleading and has agreed to pay a regulatory settlement to the Commission.

On 1 February 2017, the Advertising Standards Authority (ASA) upheld a complaint made by a member of the public in relation to a radio advertisement for Lottoland. The complainant challenged whether the advertisement misleadingly implied it was a lottery as opposed to a betting product. The Commission reviewed Lottoland’s marketing – including its affiliate website MyVoucherCodes – and found that Lottoland’s advertisements continued to be misleading, despite previous dialogue between the Commission and Lottoland on this issue. In particular, the Commission found that certain marketing communications contained material information presented in a manner which was unclear and ambiguous, and therefore misleading. The Commission held that it would not have been clear to the average consumer that he or she was participating in betting as opposed to a lottery, resulting in the risk that consumers take a transactional decision they would not have taken otherwise.

Offering betting on the outcome of lotteries, other than lotteries which form part of the National Lottery, is permitted. However, when marketing such products, operators must make it clear to consumers that they are participating in commercial betting , rather than entering the charitable lottery itself. Operators functioning in this space should take a proactive approach in assessing their – and that of their affiliates’ – marketing materials to ensure consumers are not being misled about the nature of the products on offer. Other operators in the ‘bet-on-lotteries’ space have already gone through the exercise of clarifying the terms on which their offers are presented and are not known to be subject to regulatory scrutiny. The Commission mention previous engagement with Lottoland and it may have been a perceived dragging of the heels in response to informal engagement that caused the Commission to administer a penalty.

In addition, the Commission’s focus on the activities of Lottoland’s affiliates is further warning that the Commission is increasingly regarding affiliates as the proxies of operators, regardless of the degree of practical control that may in reality exist.  Operators who aren’t sure that they can control their affiliates to a meaningful degree are likely to come under increasing regulatory pressure simply to switch them off.