September 13, 2017

The ASA openly states that its intention is not to punish advertisers and broadcasters who are having difficulty following their rulings but rather to educate them on how to stay on the right side of the Advertising Codes. For those advertisers seen to be “breaking the rules”, however, the question most often asked is “what are the consequences”?

Is bad publicity enough?

There is certainly truth behind the ASA’s belief that one of its most persuasive sanctions is bad publicity, especially if the breaches arise from rules designed to protect consumers. While the breaching ads may be disqualified from industry awards and advertisers may even appear on a ‘bad advertisers’ list, unless the public views the breaching ad as damaging, the sanctions don’t necessarily hurt the brand in breach.

Learning from the gambling sector

Online betting operators and their infringing ads have been the subject of much press coverage – sometimes because there is real public concern that the advertisements are socially irresponsible or misleading and sometimes highlighting the creativity of the teams or agencies behind the adverts and their skilful avoidance of code breaches.

The ASA’s adjudications may at times be considered toothless – perhaps even tempting some in the industry to run ads which are close to the bone. However, the industry’s regulator, the Gambling Commission (the Commission), has backed up its well published intention to increase enforcement efforts and has issued fines against two operators for advertising failings.

The Commission has issued a £300k fine to gambling operator BGO Entertainment Ltd (BGO)^[1] and has accepted £150k payment in lieu of a fine from EU Lotto Limited (Lottoland),^[2] for misleading advertising presented on its own and its affiliates’ websites. The BGO fine represents the first time the regulator has used its powers to impose a fine for advertising failings and is a clear indicator that it is losing patience with the continued prevalence of misleading gambling promotions.

Breach of licence conditions

The Commission reinforces the obligations imposed under Britain’s advertising codes by making it a condition of holding a British licence that marketing must abide by the CAP and BCAP codes. A breach of a licence condition can lead to enforcement action, as it has done here.

It’s clear from BGO’s decision notice that it might have avoided a licence review and/or a fine by taking steps to remedy the issues that the Commission had previously identified in their advertising materials

Lottoland has previously come under pressure regarding the transparency of its betting product and despite acknowledging that Lottoland had made improvements in clarifying its offer, the Commission identified a number of marketing instances where Lottoland had misled its audience by failing to properly clarify that it was offering the chance to place a bet rather than play a lottery.

Cross-sector lessons

These decisions have real consequences for  betting operators – perhaps there is a lesson for advertisers in other sectors?  Regulators such as Ofcom hold similar powers to the Commission, which are applicable both in the linear and on-demand world.  Also, in each of the decision notices, the Commission placed emphasis on the need for operators to take responsibility for the actions of their affiliates, holding BGO and Lottoland to account for failings identified with affiliate marketing carrying their respective brands. All advertisers, not just operators of online betting services, must satisfy themselves as to the ability – and appetite – of their service providers to behave in a compliant manner.

[1] Decision notice – Review of BGO Entertainment Limited’s operating licence (April 2017)

[2] Lottoland public statement  (June 2017)