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UK ADVERTISING BY REMOTE GAMBLING OPERATORS

New advertising guidelines come under scrutiny

Since the Gambling Commission and the Department of Culture, Media and Sport issued a Note on advertising by remote gaming operators (“the Note”) on 16th March, there has been some uncertainty and discomfort in the remote gaming sector about the legality of its advertishing.

      Until the Gambling Act 2005 (“the 2005 Act”) is implemented in September 2007, there is no consistent legal regime that applies to the advertising of all types of gambling.  In brief, the current position is as follows.

  • Gaming can be advertised subject to severe restrictions on content under section 42 (1) (c) of the gaming Act 1968 (“the 1968 Act”).
  • Bingo can be advertised and is not subject to the above restrictions.
  • Betting can be advertised operators in Britain (but there are restrictions on advertising licensed betting offices).
  • Bookmakers located outside the UK are prohibited from accepting bets through UK agents or advertising for UK custom by section 9(1) of the Betting and Gaming Duties Act 1981.
  • Lotteries can be advertised if the operator is located in Britain but section 2 of the Lotteries and Amusement Act 1976 prohibits the sale of tickets, advertising and promotion of foreign lotteries in Great Britain.

It is the advertising of remote gaming that has come under attack and this article will focus on the Note and its aim, “to provide guidance to advertisers, publishers and remote gaming operators on the types of advertisements that the Government and Commission will consider passing to the CPS3 on the basis that they are in breach of the 1968 Act.”


      The gambling law regulating advertising of remote gaming is section 42(1)(c) of the 1968 Act that says:

  • “4291)…no person shall issue, or cause to be issued, any advertisement…
  • (c) inviting the public to subscribe any money or money’s worth to be used in gaming whether in Great Britain or elsewhere, or to apply for information  about facilities for subscribing money or money’s worth to be so used.”

Two key points to note:

  • It is the use of the word “elsewhere” that means adverts for gaming on offshore sites are included.  What matters is not where the gaming takes place, but where the advert is placed i.e. in Britain or commissioned or arranged from Britain.
  • To reach section 42(1) (c) the advert has either to:

*   Invite the subscription of money or money’s worth for use in gaming and/or
*   Invite an application for information about facilities for subscribing money or money’s worth for gaming.

 

If there is no invitation in either case then there is no breach.  An invitation does not have to be in words but can also be by images.  The key question that the online gaming sector has been grappling with for several years is what amounts to an invitation to subscribe money or apply for information etc?  Now the Government and the Commission have told us that they consider that the following are examples of invitations to subscribe money:

  • Playwin Poker everyday”
  • “Playwin Poker here”
  • “Try your luck in our casino”
  • “Test your nerve with poker”
  • “Step up and play our £ 100,000 thriller”
  • “Play online anytime”

Only one of the above examples includes a mention of any money but Note says, “the concept of “inviting” the public extends to any inducement or enticement or encouragement to act in a certain way.  Therefore, to offer someone a bonus or benefits for taking part in gaming or submitting money for use in gaming is a form of invitation.”
      This will disappoint operators who were relying on the fact that their adverts may have been OK if they did not contain a reference to  money, particularly, if they offered free play facilities on their sites.  Further examples of prohibited advertising included in the Note are:

  • “We will match your first deposit”
  • “Join today and ”
  • “Referral bonus for every friend you introduce to the party”
  • “Bonus on every deposit”
  • “£ 150 free for all new players”
  • “Win and double your money”
  • “Free entry”
  • “Guaranteed cash prizes everyday”
  • “Win big cash prizes”
  • “Win a trip for two to Las Vegas ”

It is not illegal per se to advertise remote gaming and it is recognized in the Note that overseas gaming operators can advertise in Britain “whether in newspapers, magazines, billboards, or on the sides of buses and taxis and on tube trains”. 

     Nor is the Note new law, it is a statement of the Government and the Commission’s interpretation of how the current law regulates and restricts the content of advertisements.  Whilst acknowledging that the law places no restriction on operators advertising purely factual information, the example given in the Note is a wholly innocuous one of providing the name and address or URL of the gaming operator.  Examples of factual statements that the government and the Commission would consider illegal are those that “are often used to encourage people to gamble” which they say include the following:

  • “Free million pound poker tournament”
  • “5 new poker games”
  • “Daily jackpots”
  • “”Million pound guaranteed tournaments every month”
  • “Best selection of slots”
  • “Top payout £ 1,000 per spin”
  • “Weekly tournaments ”
  • “progressive jackpots”
  • “Poker games to suit everybody”
  • “Up to 100,000 players on-line
  • “More prizes – bigger jackpots”

Which types of adverts are affected?  The definition of the word “advertisement “ used I section 42 of the 1968 the Government and the Commission would apply an “always speaking” interpretation of the law.  The Note says that the law applies to all remote advertising and websites, pop-ups, banners, hyperlinks, text messages and emails.
      The Government and the Commissions do still accept that the offence under section 42(1) (c) can only apply to a person who issued or caused to be issued to a prohibited advert whilst in Britain.  This means that if a website advertisement is published abroad and any publishers, advertising companies and owners or marketers of advertising space and marketing companies are also abroad then no offence would have been committed in Britain.  However, the Note warns that if an instruction to issue a prohibited advert is linked back to a person in Britain, then that person, having caused the advert to be issued, may be liable for prosecution.
      How does the Note square with previous guidance on advertising?  It is not obvious that it does.  The existing Guidelines for the Casino Industry published on the Commission’s website say.
      “A passive web website (being  one found by someone deliberately choosing to access the site concerned), whose principal purpose is to provide information about gaming, including individual casinos, will not be taken as constituting advertising for the purpose of section.

The passive website exception appears to conflict with the suggestion in the Note that the Commission will be reporting illegal remote advertising (i.e. on website. TV etc) as well as other illegal advertising by remote  operators (i.e. in magazines, on billboards etc).  If a banner advert for a gaming operator appears on passive website “Whose principal purpose is to provide information about gaming” will this be considered illegal if it contains an invitation to subscribe money?  It is not clear from the Note which does not mention the passive website exception at all (nor for that matter does it mention the exclusion of bingo from the advertising restrictions).
As to advertising abroad, the Casino Guidelines say that it is not subject to the restrictions elsewhere in the Guidelines provided the circulation is mainly outside Britain and any distribution within Britain does not exceed 20% of the total.  There is no reference to this % in the Note- presumably the rule still applies.
There is also no mention in the Note of the exception for media coverage, however, it is covered in the Guidelines in some detail as follows:
“Provided its publication is not conditional upon related advertising or any other such inducements, the restriction of these guidelines to not apply to:

  • articles in the media which result from an approach from that media; and
  • the supply of press pacts to the media when it would be expected that any commercial  organization might wish to do so, on such occasions as the rebranding opening or major refurbishment of a casino.

Unconditional press release containing information on matters likely to be of genuine interest to the public are acceptable”.     
      An unconditional press release means “that only factual information is included: with no financial or other incentive offered to the media in, or associated with, the release.”

     

With regard to pure advertising, will operators now restrict their adverts to little more than the URL of the operator?  Whilst it would undoubtedly eliminate any risk of being reported to the CPS, it would also make it a lot harder to give any information about the service offered or, enable the consumer to differentiate between operators or brands.  It is not such a problem for group companies with a UK sports book or offshore bingo site that, in each case, allows them to promote their brand generally by unrestricted advertising.  Those operators in the casino and poker sectors may well find it tougher in a crowded and highly competitive market place.
      The current clampdown on gaming advertising is an interim measure as the legal picture will change dramatically when the 2005 Act is implemented next year.  Section 42 will go and there will be a new offence to advertise foreign gambling under the 2005 Act.  Broadly speaking there will be 3 groups in terms of advertising regulation:
      Gaming operators licensed in the UK, Gibraltar or located elsewhere in the European Economic Area (“EEA”) who will be able to advertise in the UK;  Gaming operators outside the EEA but in a territory which is on the “White list” of non-EEA territories approved for advertising gambling in the UK.
      Gaming operators licensed anywhere else who would commit the offence of advertising foreign gambling if they attempted to advertise in the UK.  As at the date of writing there is no while list and the DCMS has indicated that it will issue a consultation document in April 2006 setting out the process by which non-EEA territories can apply to be included on the white list.  Those permitted to advertise in the UK will have to comply with a Code of Practice that has not been finalized yet.

      The issue with regards to this article is the relationship between the new regime and the Note.  Applying the interpretation of the law in the Note, it is obvious (from the content of adverts recently published) that a number of operators have placed illegal adverts.  If they do not change the content radically, the commission has said that it will report alleged offences to the CPS, those operators (and publishers, distributors etc) risk prosecution.
      Many of those at risk of prosecution are likely to be located in territories that from September 2007 will have the right to advertise in the UK anyway (once the 2005 Act is implemented).  Presumably, is mostly companies currently in the offshore gaming sector that the Government and Commission are aiming to attract onshore as applicants for Remote Operating Licences under the new regime.  It can hardly be conducive to prosecute your potential customers under a law based on an outdated policy.

      It seems likely that the Commission will be most concerned about blatant and /or repeat offenders or those who ignore warnings to change their ways.  This would be consist with the historic approach of the Gaming Board and the Police to those who commit misdemeanor in gambling law and sensible in view of the Commission’s objective (albeit in relation to the 2005 Act) of aiming to regulate with a reasonably light touch.  But then again, this is not exactly the tone of the message in the Note and it continues to be an unsettling period in the lead up to the new regime.

AUTHORS PROFILE -  PETER WILSON is a gambling law specialist with over fifteen years experience of acting for clients within the gambling sector.  He has represented clients from across the gambling spectrum, including internet and iTV gambling, poker tournaments, the amusement machine industry, bingo, casinos, pools promotion, bookmaking, betting exchanges, lotteries and prize competitions. He has experience in appearing before the Gaming Board of Great Britain and is very familiar with the standards and requirement of operating within the British gambling industry.


      Peter is the author of “Gambling on the Internet” for Sweet and Maxwell’s Encyclopedia of E Commerce Law loose-leaf, and a contributor to River City Group’s Internet Gambling Report 2005.  For further information, Peter can be contacted by email at peter.wilson@tarloyons.com , telephone : +44(0)20 7814 6850 or mobile: +44(0)7900 245984.

 

 

 

 
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