Time to join the grown ups

Recent UK government statements about clamping down on gambling advertising mean it is time for advertisers and publishers to show their maturity. Sarah Treanor reports.

In fairness to Tessa Jowell, the UK and sport, her pronouncement regarding the possibility of a crackdown on gambling advertising was at least well-signaled, if not well-received, in certain quarters. “It is clear some adverts have been breaking the law,” she said in November of last year.
     “I am not willing to tuern a blind eye to this and have agreed with the Gambling Commission that we should crack down on advertisers and publishers who knowingly break the law. We will issue them with new guidance and I am putting them on notice that we won’t hesitate to ask the Crown Prosecution Service (CPS) to act. ”
      The subsequent 16 March message from the Department of Culture, Media and Sport (DCMS) and the Gambling Commission was equally unequivocal – UK egaming advertisers, in their eyes, had been pushing their luck.

      Under the jointly issued guidance note it was clarified that a strick interpretation of section 42 of the 1968 Gaming Act would be followed, coupled with dramatic warnings about custodial sentences and crippling fines.

A climate of fear?

So should UK advertisers and publishers be fearful of what is to come between now and the implementation of the Gambling Act in 2007?  Carl Rohsler, partner and head of the gambling team at law firm Hammonds, shares the view of many that there is a danger in overstating the case. “Most of the key poker players in the industry have maintained a consistent and conservative approach,” he says.

     “However, in recent years, some companies did overstep the mark. While everyone realizes the 1968 Act is on its last legs, the government, and in particular the newly formed Commission, cannot afford to have the law ignored completely. The industry has received a warning. Now it must respond by demonstrating its maturity. ”
      Peter Wilson, partner at Tarlo Lyons, adds : “This cannot just be dismissed as a public relations exercise to satisfy the minister and there is a genuine desire to rein in blatant offenders. ”

“While everyone realizes the 1968 Act is on its last legs, the government, and in particular the newly formed Commission, cannot afford to have the law ignored completely ”

      Many reasons lie behind the new guidance: an attitudinal shift towards gambling,
the growth of the industry, and the current political climate, particularly given the fuss over the awarding of the new ‘super-casino’ licenses.
      Jason Chess, electronic gambling specialist at media and technology law firm Wiggins, sees the last point as critical. “I view this as intensely political. The DCMS has recently had an awful lot of flat over alcohol and licensing reforms, and  this is an attempt to show what you could call the ‘moral majority ’ that it is capable of imposing rules. People have raised their voices about the proliferation of gambling under the new law and this is an attempt to reassure them. ”

A chance to self-regulate

A broad consensus is becoming apparent, that a responsible industry should react in a way which makes the next 18 months a practical ‘trial’ for self-regulation. Tom Kavanagh, deputy chief executive of Gambling UK Commission, says : “The new law, which comes into effect in September 2007, will change the current position. It is intended that the advertising regulatory authorities will issue codes of practice for broadcast and non-broadcast advertising, and these codes will apply equally to all sectors. ”
      The Gambling Act promises the availability of licenses for egaming companies based within the UK. With government encouragement for offshore firms to re-locate, it may seem there are mutual benefits to a relationship between the egaming companies and government to be built on mutual respect and understanding, rather than threats and sanctions. I hope and believe an unspoken accommodation will be arrived at between now and 2007,” says Rohsler.
      Kavanagh reiterates the importance of self-regulations : “The draft codes will be issued in the summer. However, offshore operators will only be allowed to advertise in the UK if they are based in the European Economic Areas (EEA), or they are operating out of an approved jurisdiction.
     “The DGMS is in the process of finalizing a list of approved jurisdictions. If these self-regulatory codes do not work effectively, ministers have the power to implement restrictive regulations. ”

      In the view of the experts, now is the time for the experts, now is the time for the industry to show its maturity. Simon   Mansell, chief executive of online marketing agency TBG, says : “It will not turn into a situation such as that with cigarette advertising in the 1980s. What we need to avoid is blatant flouting of the law. ”
      In doing so, advertisers and publishers have reconciled themselves to creative challenges, perhaps erring on the side of caution. Anthony Taylor, commercial director at new UK daily newspaper The Sportsman, says : “We have been made aware that even running an ad showing a woman in sunglasses could be considered  sexy. The DGMS has made it clear this can appear as an inducement to gamble and we should not run anything considered to be linking sex with gambling. As the new kid on the block we needed to, and have taken, a proactive approach. ”
      Tim Farthing group advertising manager at Dennis Publishing, agrees it is not a situation to be brushed aside. “If we couldn’t take advertising we wouldn’t take advertising we wouldn’t   have a business. We are the most at risk and as a result we are the most at risk and as a result we are trying to be the white knights of the industry. A fine of the scale talked about would mean the end of us. We are taking advice and trying to establish a best code of practice with our advertisers. ”

No surprises

Kavanagh argues the perceived ‘severity ’ of the guidance note should not come as any surprise. “If an advertiser needs to significantly reconsider its approach. It would appear their previous actions were in breach of the law,” he says.
     “We expect both advertisers and publishers will operate within the law, and that prosecution can therefore be avoided. However, as we made clear in the guidance, we will pursue any suspected breaches. ”
      The prospect of a ‘test case’ is not one greeted with enthusiasm by legal experts, who doubt it would set any precedent. “A test case would not be beneficial as any prosecution would have to focus on the specific words used in the alleged illegal advertising copy. ”
     “Do I think they will prosecute?” asks Rohsler. “Perhaps, but with a heavy heart, and only in circumstances of a clear breach. ”
      The note’s interpretation of the law has been criticized, with particular reference to the example set out in section 20. Rohsler says : “I find it hard to justify any interpretation of section 42 which states that the term ‘Playwin Poker for free’ is an invitation to the public to subscribe money. There is a danger the government loses credibility by overstating the position. ”

Subject to interpretation

The particular phrase “in the government and the Commission’s view”, from section 18 of the guidance, has fuelled controversy, with lawyers reiterating that the authors are not lawmakers, not enforcers.
      Chess says : “The DCMS is providing an interpretation of the law. They are not the law enforcers. The legality of an advert is not up to them, it is down to a judge. I could see a messy argument if the authorities chose to pick a fight over the ‘grey area ’ of factual statement. If they picked on the more blatant ads it wouldn’t help anyone because we all know they ’re unlawful already. ”
      At a time when the National Lottery can advertise on television at peak times, and given the boom in the general gambling industry, the DCMS and Commission interpretation of the law arguably belongs to a bygone era. “The statute is still there from 1968,” says Rohsler. “Even if the DCMS has taken the right view, it is the view of a law designed 40 years ago. ”

      Wilson agrees public policy has moved on. The provisions under section 42(1)(c) of the 1968 Act were introduced to support a general policy only to permit the supply of gaming to an unstipulated demand. “That policy is now defunct,” he says.
      Farthing adds : “This is a mature industry now. The 1968 Act was restrictive, the 2005 Act is more positive. By 2007 it will hopefully be up to the Advertising Standards Authority (ASA) to regulate. ”
Wilson sees the recent developments as part of a bigger picture. “The UK Gambling commission aims to be the world leader in having a well – regulated remote gambling licensing regime. It cannot herald a new robust legal environment on the back of a failure to enforce the existing law. I think the tough statement on remote gaming advertising is a only the start. ”

He also cities a recent article by Sarah Thomas, spokesperson for the DCMS, whether she warns the industry’s response will be a factor in deciding if a “move away ” from general policy of self-regulation will be needed.

A test case would not be beneficial as any prosecution will have to focus on the specific words used in the alleged illegal advertising copy ”

Play it by ear

Chess summarizes : “I have advised my clients to be prudent. Don’t completely lose your bottle, but equally don’t put your head over the parapet right now. “They can still take advantage of the freedoms sections 42 offers. Factual statements are not illegal. Parliament could have banned it all but it didn’t . ”

      Rohsler is positive about the future, and argues new legislation provides an opportunity for greater freedoms. “It would be a shame to jeopardize that opportunity as a result of a disagreement over the semantics of a moribund act.

It is in the gambling industry’s interest to act maturely and demonstrate its good faith the regulators, and for the regulators to respond with regulations which allow the industry to continue its growth as a feature of the mainstream leisure market. I think we will get there in the end. ”