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Do advertising restrictions promote responsible gaming?

By Lewis - 28 June 2019

Despite its ongoing efforts to encourage responsible gaming, the industry remains a target for negative press misrepresenting problem gambling, putting pressure on politicians and regulators to enact more aggressive consumer protection measures. As such, markets like Italy, Spain and the United Kingdom are applying serious restrictions on gambling advertising or, in some cases, a full prohibition. G3 speaks to John Hagan, about whether these restrictions will have an impact on future US gambling regulations?

Are we heading for wide-spread worldwide ad bans on gambling firms?

You cannot generalise across all jurisdictions, since the culture relating to gambling, the evolution of gambling and the products available vary from jurisdiction to jurisdiction. It is therefore impossible to predict that what happens in one jurisdiction will happen in another. We have seen that jurisdictions are heading in different directions. The UK, for example, has liberalised enormously in the last 15 years, but is now entering a period in which we are moving in the other direction, with authorities tightening rules on gambling.

The US, on the other hand, is liberalising its sports betting market and moving in another direction entirely. What we can safely say is that the extent to which operators are able to offer gambling is on the agenda in all jurisdictions, though regulators and governments consider the question in the context of their own jurisdictions.

How useful are voluntary codes of conducts?

I think they are incredibly helpful. If the industry is always ahead of this argument and seeks to self-regulate, then it minimises the risk of advertising becoming an issue in their jurisdiction and minimises the risk of restrictions and prohibitions being imposed upon them. If the anti-gambling lobbyists, which exist in every jurisdiction, are allowed to take control of the agenda, it is much more likely to end badly for the industry.

Can code of conducts reverse bans?

It is a very important point to consider. If you look at the position in Italy, for example, now that there is a prohibition on gambling advertising, it will be very difficult to reverse that decision for a long time. We all know there are no votes in gambling for politicians. In the present gambling regulatory climate worldwide, what politician is ever going to make a case to reverse a ban on advertising gambling? So it is all the more important that the industry gets ahead of the argument and self-regulates to ensure that a ban is not implemented, because it could be in effect for a generation.

Do you need everyone to sign-up? Should this be legislated? What body polices this?

I think you need to establish a critical mass of support for any self-imposed restriction, but equally not wait for everyone to sign up to it. You also cannot be moving at the speed of the slowest or seeking to find the lowest common denominator. Such measures are unlikely to be sufficient to ward off legislative advertising restrictions. The industry needs to drive this forward itself, to listen to public or regulatory concerns and self-regulate. Self-regulation can even be more effective than legislation.
If legislation imposes restrictions, history has shown that industry, and not just the gaming industry, has a tendency to look for loopholes. However, if the industry itself creates codes of advertising practice, if the industry generates a critical mass of support for these codes, you can be sure that they are going to make them work.

With the migration of advertising to Internet (social media) channels that are international by design – how do government’s control the gambling advertising on these channels when they’re unable to stop anything else?

An operator should be advertising on the Internet in the same way as they would advertise on television, with the same code of ethics applied to online as to their broadcast advertising, always having in mind the protection of the young and the vulnerable and fairness to consumers. In terms of controlling advertising on the Internet, regulators are not seeking to regulate the Internet, they do not have to, instead they regulate the licensees through licence conditions relating to advertising. If licensees fail to comply with the conditions of their licence, sanctions will be imposed.

There are two opposing arguments – that advertising increases demand and overall consumption of gambling – and that advertising affects the distribution of market share, but not consumption. Which is your view?

The evidence in the UK, which is of course a mature gambling market in both online and land-based terms, suggests that operators are advertising to preserve their market share rather than grow their client base. The number of people gambling in the UK is not increasing significantly as a result of gambling advertising, notwithstanding that a proliferation of advertising leads inevitably to the public perception that there has been a proliferation of gambling, but there are two important considerations. One is that there is an argument that too much gambling advertising on television, especially around sporting events, normalises gambling as part of the sporting viewer’s experience.

The second point is that a lot of children are watching sports and therefore they are seeing a lot of gambling advertising. It is therefore very important that gambling advertising is done in a responsible and proportionate manner and that it is not of particular appeal to children. In addressing these concerns, it is important for the industry to adopt a precautionary approach.

Does all unrestricted advertising for gambling result in a ban? Do gambling firms always go too far?

There is a responsibility on operators to do the right thing by their customers. This puts an enormous amount of responsibility on the shoulders of the overwhelming number of operators that are reputable and responsible to create a positive environment for their customers, treat them fairly and have safeguards in place to protect the young and vulnerable. Whilst I would like to believe that the entire industry behaves in this way, there will always be those who, left to their own devices, would not meet those standards. So it is important that reputable operators are not faced with a commercial and competitive disadvantage by setting their own high standards and that is where regulatory support is important through general raising of the advertising standards expected of operators and enforcement action against operators who do not meet those standards.

When does the Whistle-to-Whistle advertising ban in the UK come into force during sporting events and how significant is this voluntary decision taken by operators?

The whistle-to-whistle ban in the UK comes into effect on the first of August, which was the earliest practicable date given all the existing contractual arrangements. From the start of next season there will be a “whistle-to-whistle” ban on gambling advertising before the 9pm watershed, commencing five minutes before the sporting event starts and ending five minutes afterwards, including during half-time in football matches. In other sports, such as test match cricket match, there will be no gambling advertising throughout the duration of the event. There will also be no gambling advertising around highlights and re-runs.

In the UK, we reached a position in which the public concern was that there was simply too much gambling advertising on television. In response, the industry could have said there was no evidence to show that advertising was increasing the number of people gambling. It could have argued that just because the public is irritated by the number of ads, that is not justification to stop advertising. It could have pointed out that there is no evidence to suggest children are gambling online in response to television advertising during sporting events. Instead they chose to listen to those public concerns and take positive and decisive action to drastically reduce the amount of gambling advertising on television.

The industry came together as a whole to reach a consensus on a gambling advertising whistle-to-whistle ban before 9pm. I think this was itself a watershed moment for the UK gambling industry, which has taken a very significant step and self-regulated in terms of advertising without legislation being imposed. It has sent a message that this is an industry that is serious about protecting the young and the vulnerable and creating a very positive environment in the UK and I look forward to seeing more decisions like this in the future.

Should gambling advertising be treated the same as restricted products – such was tobacco – as we’ve seen in Spain?

I think it would be a very sad day if gambling advertising falls into the same bracket as tobacco adverting. I think we can agree that you cannot smoke responsibly. Every cigarette causes damage, whereas we operate in a wonderful gambling industry that brings fun and entertainment to the overwhelming majority of participants. We therefore need to be sensible and advertise in a responsible and proportionate way, whilst also protecting the young and the vulnerable. If we do this, then there is no reason why gambling should not be advertised like any modern leisure product.
This industry, both in the UK and the US, is extremely well regulated and licensed, subject to onerous conditions both for advertising and a whole raft of other areas of the business. If that very well regulated industry is restricted in its ability to advertise to its customers, then you are significantly increasing the risk of customers finding their way to less reputable unregulated and untaxed black market operators, of which the US has recent experience.

What’s your advice to US operators in relation to UK experiences?

It is one thing to learn from your own mistakes, but trying to learn from the mistakes of others is a very difficult thing to do. I would encourage the US industry to try to learn from the mistakes the UK has made and anticipate the public concerns and challenges relating to advertising.

As operators seek to establish market share, it is likely that it will be perceived that there is too much advertising and too much online gambling.

There will always be people opposed to the liberalisation of gambling in any market and they will seek to harness concerns relating to advertising. So if industry is going to tackle that opposition effectively, they need to be ahead of the curve on protection of the young and vulnerable, the nature of advertising and the amount on advertising, self-regulating and speaking with one voice, not divided and conquered by opponents of gambling.