Gambling Commission issues landmark fine to BGO for misleading advertising

United Kingdom

The Gambling Commission has imposed its first penalty on a gambling operator for advertising failings, fining BGO Entertainment Limited £300,000 following a licence review. The fine has been imposed as a result of the Commission finding that nine adverts on BGO’s website and fourteen adverts on websites of its affiliates for promotions were misleading and in breach of the Licence conditions and codes of practice (LCCP).

Licence Review

The LCCP sets out various requirements that operators must comply with in respect of their advertising of gambling. In particular, social responsibility code provision 5.1.7 of the LCCP requires that licensees must abide by any relevant provision of the Committee of Advertising Practice (CAPBCAP‘Guidance on the rules for gambling advertisements’) Code and the Broadcast Committee of Advertising () Code which relates to ‘free bet’, ‘bonus’ or similar offers, and to follow CAP’s regarding the same. This provision also specifically requires that all marketing communications must state any significant limitations and qualifications that apply to promotions.

In June 2015, BGO was one of several operators identified as not complying with such provisions. Despite engagement with the operator, during which BGO undertook a copy advice audit of its website by CAP, the Commission decided to commence a full licence review in September 2016.

The findings of the licence review showed that between 17 July 2015 and 21 July 2016, BGO published nine adverts on its website which breached social responsibility code provision 5.1.7. Further, between 4 February and 18 October 2016, fourteen adverts on websites of BGO’s affiliates were found to do the same (for which BGO, pursuant to social responsibility code provision 1.1.2, is required to take responsibility for). In addition to this, the Commission found that, during the Commission’s informal investigation, BGO failed to take timely and effective action to address the misleading advertisements identified by the Commission and provided inaccurate assurances that the issues had been fully addressed.

As a result of its findings, the Commission issued BGO with a formal warning and imposed a fine of £300,000 for breach of social responsibility code provisions 1.1.2 and 5.1.7 of the LCCP.

Operators beware

In the wake of its decision, the Commission has calleddecision notice for all operators to read its which sets out its findings in relation to the licence review and emphasises the importance of:

  • understanding and applying the rules relating to advertising, as set out in the LCCP, the CAP and BCAP Codes, and CAP’s guidance regarding gambling advertising;
  • taking responsibility for the actions of third parties such as affiliates, by ensuring that marketing material they use is not misleading; and
  • ensuring that advertising is not falling foul of social responsibility rules or deceiving consumers.

Operators would be wise to heed this advice. This landmark licence review demonstrates that not only is gambling advertising still very much in the Commission’s cross-hairs, but also that the Commission is willing to tackle non-compliance with financial sanctions. This action can be viewed against the backdrop of the Commission’s wider consultation on its enforcement strategy. The proposals largely focus on a move away from voluntary settlements and a greater emphasis on licence reviews, whilst also providing for the potential of higher fines for licence holders in breach of regulations.