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David Clifton – Don’t gamble on your affiliates

In my December 2016 article for SBC News, I wrote about affiliates coming into the ICO’s firing line, which in turn leaves gambling operators facing liability for affiliates’ data protection misdemeanours – a situation that will hit home even harder when the recently announced Data Protection Bill is published by Parliament and, subsequently, when the General Data Protection Regulation comes into force in May next year. More information about this can be found on our website.

However, data protection is by no means the only area where operators have to carry the can for failings by their affiliates, as was evidenced, for example, by BGO Entertainment being hit earlier this year with a formal warning from the Gambling Commission following an operating licence review plus a £300,000 penalty for breaches by them and by their affiliates of LCCP Social Responsibility code provisions 5.1.7 (requiring that marketing of free bet, bonus or similar offers must follow the CAP and BCAP Codes and must not be misleading) and 1.1.2 (taking responsibility for third parties).

I suspect some operators do not appreciate quite how wide-ranging SR Code 1.1.2 is. It requires licensed operators not only to ensure that they contract on prescribed terms with third parties (including marketing affiliates and advertising networks) insofar as the provision of any aspect of the operator’s business related to gambling activities is concerned, but also to take responsibility for the actions or failings of all such third parties insofar as those actions or failings are inconsistent with the LCCP and/or the licensing objectives under the Gambling Act 2005.

It might therefore be a good idea for marketing teams within licensed operators’ businesses to spend a bit of time digesting a CAP news item entitled “Gambling on your Affiliates?”, that has recently been published on the ASA’s website.

It forcibly makes the points that:

  • primary responsibility for observing the CAP Code remains with the gambling operator, with the consequence that marketing materials created by affiliates need to stick to the advertising rules, since otherwise the operator itself may be held either wholly or jointly responsible, and
  • ads must be socially responsible and obviously identifiable and they must also communicate significant conditions for promotions.

The ASA emphasises the need for affiliates to observe the general rules on misleading advertising and promotional marketing as well as sector-specific rules and database practice requirements, such as the need to demonstrate that explicit consent has been provided by each recipient of affiliates’ email marketing.

It makes the following sensible practical suggestions of what operators should bear in mind when keeping a close eye on their affiliates.

Under CAP Code Rule 16.3.13, gambling advertising must not be directed at those under the age of 18 and those conducting the marketing must be able to demonstrate that they have taken reasonable steps to place or target their ads appropriately.

When using social media accounts that attract a wide array of followers, this will include a requirement that marketers (and/or their affiliates) are able to demonstrate that the overall demographic of followers does not indicate that a gambling ad would be directed at those under the age of 18 in that space.

The content of the ad should also be responsible and not, for example, suggest that a consumer’s personality or self-image is likely to improve (Rule 16.3.6) or that they would achieve financial security due to gambling (Rule 16.3.4). A recent ASA ruling against Coral Interactive underlines also that ads should not suggest peer pressure to gamble, disparage abstention or suggest that gambling could enhance personal qualities.

Given that affiliate marketing falls under the CAP Code, affiliates’ ads must be obviously identifiable as marketing communications (Rule 2.1). The ASA says: “sometimes this is clear through the context alone but where it isn’t, we usually recommend using a label like “Ad” somewhere sufficiently prominent to make it clear to consumers”. It is also a requirement that marketing communications do not falsely claim or imply that the marketer (or affiliate) is acting as a consumer or for purposes outside its trade, business, craft or profession and that marketing communications must make clear their commercial intent, if that is not obvious from the context (Rule 2.3). A recent ASA finding on this point in relation to a gambling “advertorial” can be found here.

As indicated above, marketers and affiliates must ensure that significant conditions for promotions are communicated where the omission is likely to mislead (Rule 8.17). If an ad is limited by time and/or space, it may be acceptable under the CAP Code for some of the terms and conditions of the offer to be placed one click away from the ad, provided this is made sufficiently clear. However, any term and condition that changes consumers’ understanding of an offer must be made clear within the ad itself. A recent ASA finding on this point in relation to a gambling promotion can be found here.

It also needs to be remembered in the above respects that LCCP Social Responsibility code provision 5.1.7 requires in relation to marketing communications (including advertisements) that:

  • they must state significant limitations and qualifications, although any such qualifications may clarify, but must not contradict, the claims that they qualify,
  • when relating to promotions in circumstances in which the communication/advertisement is significantly limited by time or space, they must direct customers to an easily accessible alternative source where all the significant conditions of the promotion are prominently stated, and
  • the terms and conditions of each marketing incentive must be made available for the full duration of the promotion.

Readers should also note that in March this year, the ASA published Online Affiliate Marketing advice that contains a helpful infographic for affiliates and rams home the messages that:

  • the CAP Code applies to affiliate marketing (just as it does to operators’ own marketing) and must be easily identifiable as such, whether it occurs in blogs and news-sites, vlogs, social media posts, voucher sites or otherwise, and
  • care should be taken with the content, the ASA re-emphasising that “advertisers should also bear in mind that allowing their affiliates to have free rein over the content of ads does not excuse them from the responsibility of ensuring that the advertising is compliant with the CAP Code”.

We will be happy to assist both operators and affiliates with any queries they may have relating to gambling advertising issues.

[email protected]

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