A loophole that allowed gambling companies registered outside of the UK to avoid key advertising and marketing regulations has finally been closed. However, there are still concerns over other ways in which UK gambling companies are advertising their products on social media.
The start of September saw an amendment introduced to the CAP Code. This covers non-broadcast advertising and direct and promotional marketing in the UK. Campaigners had highlighted the fact that regulations set by the Advertising Standards Authority (ASA) could be avoided if a company had its registered office outside of the UK.
This included major gambling companies such as bet365, Flutter and Entain who have been given a licence by the UK Gambling Commission but have registered their offices in Gibraltar and Malta.
Reacting to the change, a spokesperson for Flutter UK commented that they were “glad” that the ASA “has clarified its guidance.” However, they added that the company was “concerned” that “the new rules only appear to apply to licensed operators and gambling brands.” Those sites who operate on the unlicensed and unregulated black market will not be affected by the changes.
Awareness of the loophole had been raised by Dr Raffaello Rossi who works as a marketing expert at the University of Bristol. He had stated that of the ten largest gambling brands in the UK were exploiting the loophole. Between them they had around ten million followers on social media. Due to their overseas registration, they were able to post advertisements that didn’t comply with the UK’s advertising rules.
While he welcomes the changes that have been announced, he said that the situation “also raises serious questions about the ASA’s competence.” .He stated that other groups such as the All Party Parliamentary Group on Gambling Reform and media outlets had been talking about the loophole for a long period of time.
He called for the ASA to explain how this situation happened and “why it took so long to fix.” In addition, he wants to know what steps will be taken to “ensure similar regulatory failures do not happen again.”
Lord Foster of Bath is the chair of Peers for Gambling Reform. He has also welcomed the changes but says there is still a major problem being caused by social media advertising which needs to be “urgently addressed.”
His view is that online gambling advertising, particularly ‘content marketing’ is “still completely out of control.” He added that a major problem is that there is no proper regulatory oversight in place to deal with the problem. His concern is that the problem is impacting children and young people who see the gambling advertisements. “I do not understand why this abject failure is not being urgently addressed,” said the peer.
The ASA say the amendment will mean social media ads that are aimed at UK consumers will now need to follow the set guidelines, regardless of where the business is registered. They also plan to carry out proactive checks on the non-paid for posts that are made by UK gambling companies.
What is known as ‘content marketing’ describes the situation where social media pots that contain memes are used. These could for example make an offer of a free bet being received by a customer if certain conditions are met.
Bristol University research has indicated that the use of memes is extremely appealing to children. While they include the name of a gambling brand, it is an account that has nothing to do with the betting industry that publishes them. It is common that whether the account holders are in a paid partnership with the gambling company mentioned is not revealed.
The ASA say that they need to look at these posts to determine if they come under their jurisdiction. This means determining “whether they are ads by virtue of being directly connected to the provision of gambling services.” Ongoing investigations will help “to build a precedent in this area” said an ASA spokesperson.
One such example included a video of a man with a pet owl stating: “I swear owls are just cats with wings” and accompanied by laughing emojis. That all sounds rather innocent but the video also featured the words ‘gamble responsibly’ and a watermark for the gambling company Stake. They used to hold an operating licence in the UK and sponsor Premier League club Everton. After a number of controversies they left the UK market in 2024.
The video appeared on an account that contains many that are of interest to children by mentioning the owl Hedwig who appears in the Harry Potter books and movies. Speaking on the subject of ‘content advertising,’
Companies have been given until December 1 to give their comments and feedback on the CAP changes. A formal review of the changes will then be held.
