SAT, 29TH APR 2017

In-Depth Analysis for the gaming industry

IN-DEPTH 6 March 2017
Is the gambling industry unfairly targeted by advertising regulators?
Operators on both sides of the Atlantic have found themselves in hot water for their television adverts. But were the criticisms justified? Or is it one rule for some, another for others?
By Caroline Watson

The spotlight has been firmly trained on gambling advertising in the UK in the last few months, with the triennial review placing focus on the impact of gambling advertising and whether adequate measures are in place regarding player protection. With 730 gambling adverts prompting complaints to the UK Advertising Standards Authority (ASA) in 2016, is gambling advertising being subjected to overly exacting standards?

In recent months the ASA has condemned adverts from companies such as Ladbrokes, William Hill, BetsStars, Coral Interactive and more. The question stands as to whether the watchdog is monitoring the situation fairly, or is it demonising the gambling industry. As Steve Donoughue, CEO at www.gamblingconsultants.co.uk and regular contributor to Gambling Insider says, the ASA is “taking concerns about the negative influence of gambling advertising to an as of yet unheard of degree.” However, the press officer for the ASA, Matt Wilson comments that is has remained “nothing but even-handed in administering the strict advertising rules. A suggestion that we’re unfairly targeting the gambling industry is at odds with reality.”

Wilson illustrates his point by noting the fact that while complaints were received concerning 730 gambling ads last year, fewer than 10% prompted formal investigation, while just 33 were banned. Furthermore, gambling adverts accounted for around 6% of the overall total of complaints made to the ASA in 2016.

Nevertheless, in light of Donoughue’s assessment, is it fair to say that the gambling industry is being held to overly high standards with regards to the manner in which it promotes itself?

A TV ad for Sky Vegas was banned earlier this year for using a “roulette rock star”. The ad features an everyman character called Michael who transforms into a betting legend “rock star” when he gambles. Although Sky Vegas explained: “Michael remained the same person with the same everyday qualities... he only felt like a ‘rock star’ because of the excitement of playing at Sky Vegas.” The ASA concluded, “The ad suggested that gambling would enhance the personal quality of those gambling.”

Similarly, a tongue-and-cheek TV ad for BGO Entertainment featuring actor Verne Troyer rapping “my winning makes me so rich”, was also condemned. Whilst BGO insisted that Troyer’s character was the owner of the casino and a not a gambling customer, the ASA still deemed it inappropriate.

The regulatory organisation banned the advert, ruling that it “suggested that gambling could be a way to achieve financial security”. The ASA does not want viewers to assume that they too could live the extravagant lifestyle portrayed in gambling adverts. Whilst the ASA states gambling advertisements must not “portray, condone or encourage gambling behaviour that is socially irresponsible”, it seems they also disallow the notion of gambling reaping any kind of rewards.

The ASA’s stance on alcohol advertising states that they place strict controls about the placement and content of alcohol ads, although their primary concern is placing ads around programmes “commissioned for or principally targeted at audiences below the age of 18.” Yet it does not allude to the notion that alcohol advertisements might ‘disillusion’ the audience in the same way gambling has the potential to do so.

Earlier this year, Kronenbourg’s Eric Cantona ad escaped an ASA ban following a complaint from the Youth Alcohol Advertising Council. The advert depicted Cantona and his two dogs delivering the alcoholic beverages “to the deserving”. The YAAC challenged whether the ad implied that alcohol could “enhance confidence, had therapeutic qualities, and was capable of changing mood, physical condition or behaviour.” The ASA disagreed as the scenarios were “exaggerated, humorous and farcical.” Conversely, these are the same reasons BGO gave in excusing their Verne Troyer commercial. It could be arguably deemed as “socially irresponsible”, however a bias seems to exist when deciding what constitutes as tongue-in-cheek.

Steve Donoughue comments: “We will soon have them (ASA) suggesting that just to show people having fun while gambling is a direct cause of addiction.” He sees the ASA’s reaction to BGO and Sky Vegas adverts as over-stepping the mark, whereby they have “interpreted the rules far too extremely and should be called out for it.”

“Gambling is fun, you can win money. These are facts, just as much as the obverse is and we should be allowed to at least show it.” No one is suggesting that gambling advertisements should lie or overly glamorise their products or services. However, isn’t the whole point of advertisement meant to attract the audience? Surely an amount of creativity must be allowed in order to sell a business or product, without the government deciding for us what we can and cannot see."

Recent statistics show that the overall level of problem gambling in the UK population is estimated between 0.5% and 0.9%. Christopher Snowden pointed out: “There are fewer people gambling and no change in the rate of problem gambling. The rise of online gambling, the introduction of fixed-odds betting terminals and a dramatic increase in gambling advertising has had no effect on rates of problem gambling.” There must be an understanding that audiences are not unintelligent, a mildly entertaining or surreal advert is not going to suddenly turn them into a problem gambler.

Culture Secretary, Karen Bradley, recently told the House of Commons: “My children can recite just about every gambling ad there is”. But why does this matter? Adverts are purposefully made to be memorable and increase product awareness without necessarily increasing sales. “It seems highly unlikely Bradley's children will bankrupt her family by spending their pocket money, even when gambling is illegal for children”, Donoughue adds.

Nearly 80% of the ASA's work involves responding to and tackling concerns about misleading ads and there is a reason for this. Proposing that gambling advertisements mislead, giving people abilities that do not exist, is a bit too stringent because that is what ads generally do show. Our role as an industry is to show consumers that gambling can be fun for practically everyone, and a few adverts hasn’t and won’t change that. I don’t think anyone would disagree that the ASA's role to protect audiences from falling victim to false advertising is an important one. Although the recent rulings against BGO, Sky Vegas and Kronenbourg show there is a need for more clarity around the notion of “glamorisation”.

It seems the rules and definitions the ASA abide by are too vague and lead to misunderstanding, and it seems there is no "humour" where gambling advertisements are concerned. The public should be given far more credit in their understanding of an advert. If you are legally of age to gamble, then you should be aware that the majority of gambling money goes into the hands of gambling operators. As Donoughue states: “It is only right that we realise that a certain amount of creativity is allowable because the majority have an IQ over that of a cabbage and those that don’t, will come to a sticky end whatever you do.”

Whilst there are two sides to this argument, the operators are more often than not portrayed as the “bad guy”. The truth is that gambling can be fun and there is a chance that you can win money, but of course this does not happen all the time. It is in fact this “chance” that draws a number of players to participate. At the end of the day, advertising is glamorising a product, so it only seems unjust when the gambling industry is continually singled out. Donoughue concludes: “The tide is definitely turning to one of reaction and unfortunately as an industry we don’t seem motivated to fight it.”

USA

A lawsuit found that FanDuel and DraftKings had deceived customers for engaging in deceptive advertising practices. The two fantasy sports companies will pay $6m each over their “alleged deceptive promotions”.

“I’m just a regular guy, who goes to work every day,” says Chris Prince in a FanDuel infomercial. “Anybody can win. It’s not just a game against professionals.” However, Prince failed to mention he was a professional daily fantasy sports contestant. He was also one of the mere 10% of players who actually won money while gaming.

New York Attorney General, Eric Schneiderman found that both sites “misled customers on key aspects of its games”. Both companies misinformed players about the substantial advantages that professional players hold over amateur players via the use of research, software and large bankrolls, with skilled players winning the big prizes by preying on the inexperienced. The enquiry also found that both companies misled players about their chances of gaining a positive return on their bets, when most players would end up losing money over time.

Schneiderman concluded: “Today’s settlements make it clear that no company has a right to deceive New Yorkers for its own profit. DraftKings and FanDuel will now be required to operate with greater transparency and disclosure and to permanently end the misrepresentations they made to millions of consumers.”

Last year FanDuel and DraftKings spent a combined $64.9m on ads for NFL broadcasts between the 10 September and 10 October. FanDuel CEO, Nigel Eccles has admitted the daily fantasy sports operator made a mistake in focusing too heavily on the prospect of players winning big money regarding its TV advertising last year. Eccles made the admission to Business Insider: “I think last year we probably focused too much on money. I think we probably were too narrow in what we were marketing.”

FanDuel spokeswoman, Justine Sacco said the negotiations were “tough but fair”. According to the AG’s office, the “agreements impose the highest New York penalty awards for deceptive advertising in recent memory.” Indeed, there should be a line drawn between what is factual and not factual, but $6m apiece seems like a lot of money to pay for false advertising claims. Chris Grove, publisher at LegalSportsReport says: “It’s difficult to say how much more exposure DraftKings and FanDuel could have found themselves facing should the claim in New York moved ahead. Given that the companies agreed to the amount as part of a settlement, DraftKings and FanDuel seem to have concluded that the price tag was an acceptable one.”

Attorneys at Law, Davis & Gilbert’s James Johnston says: “The daily fantasy industry has faced so many legal challenges that many feel the industry is being unfairly targeted.” Whilst it remains irrefutable that companies should not be able to advertise something that isn’t intrinsically true, this case highlights the excessive compensation imposed on the gambling and gaming industry.

The settlement amounts appear to be particularly steep given the current state of FanDuel and DraftKings. Due to their current financial situation, this was ultimately a necessary settlement for both. Johnston adds: “Now that both businesses appear to be in retrenchment mode, scaling back their spending and managing cash flow to ensure survival, they had to get this action settled to clear a path for the future. Having this legal action behind them was a key step.”

Similarly to gambling laws in the US, the laws in each state regarding fraud and truth in advertising are not the same. DraftKings and FanDuel have filed lawsuits in both Illinois and Texas, Johnston claims the “New York action reinforced the larger arguments made by both companies in their regulatory battle across the US”. Schneiderman focused on the significant advantage that high volume, high skill players have over the everyman due to the amount of information and data analysis required to thrive in the DFS industry. Johnston adds: “These ideas are core to the industry’s argument that daily fantasy sports is not illegal gambling, but is a competition based on skill and preparation.” It seems that the Attorney General’s Office has inadvertently made those arguments for them.
DISCUSS THIS ARTICLE
IN-DEPTH 28 April 2017
Konami's Steve Walther on Skill-based gaming
Industry interest remains strong as casinos begin welcoming the world’s first skill-based machines, says Steve Walther, Senior Director of Marketing & Product Management at Konami Gaming, Inc.
READ MORE
PREMIUM CONNECTIONS