Government calls for a review of the UK gambling advertising regulation

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

The UK Government has requested various regulatory bodies to review the existing regulation of gambling related advertising in light of the increased volume and diversification of gambling advertising and in the context of the forthcoming enactment of the Gambling (Licensing and Advertising) Bill.

Gambling Advertising in the UK

According to Davy Research, gambling companies in the UK spent approximately £690 million on marketing in 2013 and invested around 20-30% of their online revenues back into advertising and other forms of marketing activity. One of the reasons for the rise in the advertising budgets of gambling companies, particularly those offering betting services, is the new "point of consumption" tax for online operators which is scheduled to be introduced on 1 December 2014. Betting companies have been keen to win new customers over the course of 2014, not just to capitalise on the World Cup in Brazil and other major sporting events, but also to increase their market share before the "point of consumption" tax comes into force and to ensure its impact on profits is kept to a minimum.

Ofcom, the UK media regulator, in November of last year found that the number of gambling advertisements on television had increased six-fold to 1.39 million per year since the deregulation of the betting and gambling industry in September 2007 (the full 218 page report can be found here). This rise has also led to a corresponding increase in the number of complaints about gambling advertising which have been made to the Advertising Standards Authority ("ASA"), from 113 complaints in 2010 to 518 last year. In light of this, the UK Government has been under pressure to act and has now asked the ASA and Committee of Advertising Practice ("CAP") to review the existing advertising regulations on gambling and to assess how effectively they are currently enforced against gambling operators.

What will be reviewed?

As part of the ongoing Parliamentary debates on the Gambling (Licensing and Advertising) Bill, the UK Government has asked:

• the ASA to report by autumn 2014 on whether they can do more to ensure that existing rules are enforced "proportionately and consistently"; and
• the CAP to consider whether existing restrictions are robust enough, particularly in light of the recent research commissioned by the Responsible Gambling Trust which examines the link between advertising and problem gambling.

In addition, over the course of 2014, there will be two further reviews carried out by:

• the Remote Gambling Association ("RGA") in relation to its voluntary standards code, the "Gambling Industry Code for Socially Responsible Gambling", to consider whether the broadcast of gambling adverts should be entirely prohibited before the 9 pm watershed and/or whether adverts should carry more "educational messaging" on the potential pitfalls of gambling. The RGA is due to complete this review by June of this year; and
• the Gambling Commission to ensure that free bets and bonus offers are marketed in a fair and open way. The review, which was announced last month, is likely to be completed later this year and details of the scope of the review can be found here.

Given the rise in gambling advertising spend (which, according to Nielsen AdDynamix, led to £138.7 million being spent on UK television advertising in 2013), there are clear benefits to the economy under the existing regime and broadcasters, advertisers and other interested parties will want the regulatory bodies to be mindful of this when reviewing the regulations. However, notwithstanding the potential reduction in the advertising spend of gambling companies, the reviews have largely been welcomed by advertising industry bodies and Ian Twinn, ISBA Director of Public Affairs, commented: "We remain confident that the Government's decision in 2007 to allow gambling operators to advertise more widely was the right one. But given the way technology has made gambling more accessible, it is a perfectly sensible precaution to sense-check the rules so they continue to work for consumers, and for a thriving gambling industry in the UK."