ASA ruling against Profit Squad for "risk free" matched betting

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

Earlier this month, the Advertising Standards Authority ("ASA") upheld a complaint against Profit Squad Ltd for misleading consumers by describing its matched betting product as "risk free".

The Advert

The advert in question appeared on the football forum northstandchat.com, a forum for fans of Brighton & Hove Albion. The ad stated "NSC has teamed up with Joe who is one of the co-founders of Profit Squad. At Profit Squad they focus on helping their members to earn 100% risk-free profits via matched betting… If you don't make at least £100 in your first few weeks, both me and Profit Squad will be shocked". The advert also claimed "Matched betting is the easiest, safest way to make money from home. It's basically the art of playing the bookies off against each other, using free bets and bonuses on a DAILY basis to generate steady 1-way profits without risking your own money".

The advert was challenged on two grounds. Firstly the complaint was brought on the basis that the claim "helping their members to earn 100% risk-free profits" was misleading and therefore in breach of rule 3.1 (misleading advertising) of the CAP Code. Secondly, it was argued that the advert was irresponsibly targeted as it appeared on a football forum where it could be viewed by children, and was therefore in breach of rule 16.3.13 of the CAP Code, which prohibits gambling adverts directed at those under 18 years old.

ASA's ruling

On the first issue, the ASA held that the claim "100% risk-free profits" was likely to mislead as it would be understood by a consumer to mean that there was no possibility of them losing money. The ASA noted that, whilst theoretically the matched-betting process eliminated the chance of losing a bet when the various steps were undertaken correctly, the process was still long-winded and open to human error (players could lose money where the instructions were not followed precisely). Further, the ASA held that because there are instances where winnings could be refused (for example due to 'bonus abuse'), this posed a potential practical risk to the money consumers would place on bets using the service. As a result, the ASA ruled that Profit Squad may no longer use the claim "100% risk-free profit" again to describe matched betting.

On the second issue, the ASA acknowledged the popularity of football amongst children and that under-18s may visit the forum. They did, however, find that the forum was likely to attract a predominantly adult audience and was not specifically targeted at children (they did not identify any thread topics that appeared to be of particular interest to under-18s). Consequently, the ASA held that the placement of the ad on the forum was not directed at those under the age of 18 years old.

Going forwards

For those offering matched betting, this ruling is a useful clarification that describing such a product as "risk free" is likely to be deemed misleading and fall foul of the ASA. More generally, it illustrates the risk in describing any gambling as ‘risk free’ (as further explained in CAP's guidance on advertising gambling). The ASA generally assumes that consumers understand such wording to mean that they can bet/wager a certain amount without the possibility of losing money, and hence in only limited circumstances can gambling be labelled as "risk free" without misleading consumers.

The full ruling from the ASA can be found here.