The Call for Evidence probed less deeply into gambling advertising than it did other areas of potential gambling reform, acknowledging that the Committee of Advertising Practice (“CAP”) was already undertaking a separate consultation on content restrictions in advertising to ensure that under 18s and vulnerable adults were protected. However, the government noted that these groups were still being exposed to gambling ads and flagged an increase in public concern over the relationship between sport and gambling, despite initiatives like the ‘Whistle to Whistle’ ban which reduced the exposure of gambling advertising on TV around live sports.

Against that backdrop, the government requested specific evidence around the:

• benefits and harms caused by allowing gambling operators to advertise (also noting that the Call for Evidence acknowledged the significant revenue stream for broadcasters and advertisers that the gambling sector provides);
• effectiveness of mandatory safer gambling messages in advertisements in preventing harm to consumers;
• benefits and harms of promotional offers such as free spins, bonuses and hospitality; and
• positive or negative impact of gambling sponsorship in sports and eSports.

The White Paper recognises the transformation that gambling advertising and marketing has had since 2007 and the importance of the adoption of voluntary measures. However, the government’s conclusion is still that the measures have not gone far enough to mitigate the risk to members of the public experiencing issues with gambling as a result of the various forms of advertising and marketing used by the industry.

This view may have been informed by the “high number of responses, with strongly polarised views” following the questions around advertising and sponsorship in the Call for Evidence. Unsurprisingly, respondents from the health, charity and academic sectors argued that gambling advertising needed significant reform, with there being wide-spread consensus amongst those sectors that gambling advertising should recycle its pre-2005 ‘all-out ban’ approach.

By the time the White Paper was due, few people believed that it would support the complete eradication of gambling-related marketing. Andrew Taylor, executive policy officer of CAP, managed the industry’s expectations by saying “a ban on advertising would displace a load of revenue to go into other marketing activities, and ultimately advertising is only one part of operator behaviour”.

Interestingly, the White Paper states that the Call for Evidence submissions showed a “lack of conclusive evidence on the relationship between advertising and harm”- a point which we consider to be key. In addition, the Commission’s own research identified that advertising and sponsorship are passive factors that had “comparatively little impact on behaviour”. Perhaps that is one of the reasons why there is no suggestion that the statutory framework around gambling advertising and sponsorship will change.

Despite agreeing that it would be harmful for any form of advertising or marketing to ‘normalise’ harmful practices (for example, underage or unaffordable gambling), the government does not consider participation in gambling in and of itself a form of harm – which seems sensible in light of the fact that, save for some minority cases, gambling is one of this country’s largest forms of entertainment (even without considering the fact that the advertising of gambling and sponsorship deals that arise from it, are, without question, big money makers).

The White Paper, nevertheless, lays out a stricter approach to gambling advertising and sponsorship in four key proposals, which it considers target those marketing practices that are likely to increase the risk of harm.

Potential restrictions on customers who do not demonstrate ‘strong’ indicators of harm, from receiving online bonus offers and direct marketing

The White Paper identifies that gamblers with greater engagement are likely to receive greater exposure to gambling advertising given their presence on a number of operators’ mailing lists. It also acknowledges how operators utilise a range of tech in order to segment customers they look to send promotional offers to, noting that promotional offers can have the impact of prompting even non-gamblers to have a flutter.

Currently, operators are required to prevent customers showing ‘strong’ indicators of harm from receiving any direct marketing or taking up any new bonus offers, pursuant to Requirement 10 of the Commission’s customer interaction guidance, a requirement which the industry is still grappling with since its implementation.

The White Paper suggests the Government want to go even further than Requirement 10. Despite the Commission’s customer interaction guidance and the government’s acknowledgement that there was a lack of conclusive evidence on the relationship between advertising and harm from the Call for Evidence submissions, the White Paper proposes that, even where a customer is not currently showing a ‘strong’ indicator of harm, sustained targeting of a customer base with high levels of spend, with online bonuses may increase the risk of future harm to certain individuals.

As is the case in other areas commented on in the White Paper, the Commission is going to launch a consultation to explore evidence on the potential impacts of targeting mechanisms.

In advance of that consultation, it would be prudent for operators to consider how they might achieve the government’s proposal. Undertaking an exercise of analysing an existing customer base to identify those customers that are not currently demonstrating indicators of harm and placing them into a bucket of customers that may need closer attention when it comes to the sending of marketing materials and promotional offers will not be without its difficulties.

Indeed, should the proposal come into effect, being able to justify why an operator thought it was appropriate to send direct marketing materials and promotional offers to those customers who are not currently showing ‘strong’ indicators of harm but are at risk of suffering from harm will likely need to be justified against any known behavioural markers with a corresponding clear record of a punter’s gambling behaviour being maintained to inform an operator’s decision to market to them. We consider that responses to the consultation should probe the government to clearly set out how it expects operators to achieve this potential requirement.

Treatment of VIPs

Regarding high-value customers, the Commission implemented new rules in autumn 2020, (the “HVC Guidance”) which included the requirement to establish that: (i) any customer spend was affordable and sustainable; and (ii) the customer showed no markers of harm before being made a VIP. This will continue to be monitored by the Commission but as the White Paper brings about no further changes to the treatment of online VIPs, there is a clear suggestion that the HVC Guidance is fit for purpose (and with a 90% drop in those customers on such schemes since those new rules came in, it’s hard to argue against that).

Likewise for land-based VIPs, the government seems satisfied with the how these customers are treated and considers the Commission’s current controls to be adequate.

Operators must still be ready to explain to the regulator how they demonstrate compliance with social responsibility code provision (“SRCP”) 5.1.1 of the LCCP and the Commission’s guidance on high value reward incentives. They will need to do so with particular reference as to why they deemed it appropriate for a customer to participate in these schemes in light of that customer’s: (i) known level of income; and (ii) gambling behaviour.

The mechanics of bonus offers and re-wagering requirements

Another area of consultation for the Commission is around the mechanics of bonus offers, including the transparency around the wagering required to realise those offers. It will consider whether or not there should be maximum caps on wagering requirements and minimum time limits before offers expire, recognising that much work has already been undertaken by the industry to strengthen the transparency in this area.

It’s obvious to us that the thresholds at which customers can re-wager, as well as how bonuses are presented, may need a re-think by the industry. These promotions are often complex and difficult to understand, even by the most seasoned gambler. Operators will need to re-assess their current bonus offers to ensure that: (i) re-wagering thresholds are not set at a level that encourage large wagers to be placed in order to qualify for a bonus; (ii) time limits to claim winnings are extended (one week was suggested as being too short a time frame); and (iii) any offer which suggests that bets are ‘free’ are avoided. These considerations go slightly further than the current iteration of SRCP 5.1.1, which has the objective of ensuring wagering and bonus requirements are as transparent as possible. Those looking at this from a general advertising compliance perspective, however, might say that these considerations are in-line with the existing requirements of the CAP Code which seeks to ensure that this type of marketing doesn’t mislead consumers (which is a statutory obligation).

Direct marketing consent and clear opt-in offers

The Call for Evidence flagged particular concerns over ‘cross-selling’ – i.e. encouraging existing customers of one form of gambling to try another form. The main area of concern, unsurprisingly, is the cross-selling of what is considered a higher risk product (such as online casino) to, say, a recreational sports punter.

Although operators are already subject to requirements to obtain informed and specific consent to send marketing to consumers, as well as not sending direct marketing to self-excluded customers or those showing signs of harm, the government considers that additional requirements are needed for retention marketing activity too. This will all result in greater customer choice around promotional offers but will be quite a step-change for the industry.

Again, the Commission will consult on how exactly operators will obtain this consent to direct marketing and promotional offers, with the White Paper proposing principles to guide them in the meantime.

The guiding principles do, without question, set a higher bar of responsibility on operators to ensure that all customers are given the freedom of choice over the marketing they do and do not receive from an operator. Some might say that these principles are already in-line with the ICO’s guidance and the definition of consent, but it seems that the White Paper is proposing a consent-only approach to direct marketing which probably goes further than most operators’ current interpretation of the ‘soft opt-in’ rules for similar goods marketing under PECR. The result of this will be that marketing teams will need to ‘beef up’ their resources in order to offer more choice and granularity in their consent framework, as well as having the ability to record and act on each and every customer’s marketing preference. This will not only require investment in more sophisticated systems to ensure that when marketing materials are sent out, they go to the right crowd but it is also likely to result in the reduction of direct marketing which pushes similar products.

Two further packages of reforms have been proposed: (i) a stronger and more comprehensive approach to targeting and content standards; and (ii) a range of online safety measures to make it easier for individuals to reduce exposure to gambling content and access support.

The government states in the White Paper that operators should make use of tech to de-target advertising and marketing sent to children and vulnerable people, and to age-gate social media.

While the benefits of targeting/de-targeting advertising methods appear simple at first blush, in reality, there are some core issues, particularly around analytics used to identify the profile of a proposed customer. Collating data on someone’s internet activity is not a fool-proof way of identifying that person’s age. To further complicate matters, to what extent are operators expected to go in ‘de-targeting’ ads from young persons, where the data and analytics before them suggests that the proposed customer is of the required age?

Coupled with CAP’s new rule that gambling and lottery ads must not “be likely to be of strong appeal to children or young persons, especially by reflecting or being associated with youth culture” (the “Strong Appeal Test”), gambling advertising standards really have been raised.

The Strong Appeal Test prohibits content that has a strong (previously only ‘particular’) appeal to under-18s, regardless of how it is viewed by adults. This subjects gambling operators to much stricter content rules particularly if any marketing content had previously featured media or sports personalities.

The combination of the Strong Appeal Test and the White Paper’s proposals, mean that operators will be required to ensure that: (i) their advertising campaigns are not of strong appeal to children or young persons; and (ii) potentially, such advertising specifically de-targets children and young persons. Given that one of the three objectives of Gambling Act 2005 is to protect children and vulnerable persons from being harmed or exploited, the objective of these measures is understandable; yet, adopting mechanics to successfully implement these measures is not without difficulty. To eradicate children or young persons from being exposed to gambling content will require sophisticated technology and data to be available. In light of the Strong Appeal Test, the resources required in the planning stages of marketing campaigns will have also increased exponentially. Yet operators will have no choice but to invest in both; without this increased investment they will undoubtedly face regulatory scrutiny (and, potentially, reputational damage).

The White Paper refers to the three strands of safer gambling messaging that were laid out in the Call for Evidence, namely that: (i) information provided to customers at the point of use for online and offline products, such as return to player percentage displayed on machines, be displayed; (ii) links to ‘begambleaware.org’ or the ‘Time to Think’ campaign be signposted; and (iii) GamCare, GAMSTOP and GambleAware’s Bet Regret campaign are accessible.

This signposting is already prevalent, but the White Paper suggests there is a benefit in developing systemic messaging, separate from the industry, to push the safer gambling message further. The proposals start with the relevant bodies working together to develop a robust approach to informational messaging throughout the customer journey, replacing industry-owned safer gambling messaging. Once those have been developed, another consultation will be issued on further requirements for gambling operators to engage with and apply the new messaging. Operators will, no doubt, be very different in their approach to informational messaging and whether a one-size fits all approach can work, even when designed collaboratively, remains to be seen.

Until that happens, the Industry Code for Socially Responsible Advertising will be updated to extend the BGC’s existing commitment of at least 20% of TV and radio ads space being safer gambling focused to include online media.

There are no real ‘plot twists’ here. As ever, the promotion of engaging in gambling in a safe and responsible manner is a public health initiative, and we recommend that the industry put forward its views on the proposals once the consultation begins.

Gambling sponsorship deals across the sports industry provide a crucial source of income for clubs and any limitations on those won’t be without detriment to the financial standing of them. Recognising this, it’s no real shock that the White Paper does not propose legislative amendments to ban or curtail them.

Instead, the White Paper’s proposed ‘Code of Conduct’, will provide “meaningful improvements” in the social responsibility of gambling sponsorships but also to give flexibility between the material differences that obviously exist between different sports.

The Code of Conduct’s detail remains to be seen and whether it actually goes so far as to tackle ‘harm’, will be of note. Governing bodies of most sports already have robust rules in place to govern relationships with gambling companies, but they don’t necessarily push the social responsibility message, so the proposal to codify this, isn’t exactly a surprise. Of course, measures have already been taken on a voluntary basis by some sports sectors, such as the Premier League’s removal of gambling logos from the front of match day shirts from the end of the 2025/26 season.

What is distinctly missing from the White Paper’s discussion on gambling sponsorship deals is clarity on how branded content should be regulated and who should have that responsibility. Drawing the line between sponsorship material and advertising has never been so important, both for operators and the rightsholders who want to extract commercial value.

In all the myriad of planned consultations, the industry might want to consider this further to: (i) have a clearer understanding on how to structure and value sponsorship deals; and (ii) understand which rules (and which regulatory consequences) apply.

In summary, there are no real curve balls laid out in the White Paper regarding advertising, marketing and branding, yet there is a lot of detail that remains to be seen. In isolation, some might say the line taken by the government is ‘light touch’. However, taking into account the current restrictions, should the government’s proposals be forthcoming, the outcome will be significant. The implementation of the proposals will not be simple and will come at a cost. For example, with regards to the proposals relating to cross product marketing, of which there has been relatively little coverage, operators will likely need to ensure that consents are captured at the most granular of levels, data is stored appropriately, and teams are suitably resourced. The financial repercussions of this are likely to be substantial.

We strongly encourage the industry to engage in each of the consultations to ensure that the place where we end up on gambling advertising is achievable in practice and has a measurable, positive, impact on those who should be protected from the harms it might cause.

A timetable setting out the key dates for each of the consultations resulting from the White Paper can be accessed here.