A timely reminder

Last month the Gambling Commission issued a warning to operators, urging them to make sure their digital adverts are not placed on websites providing unauthorised access to copyrighted content.

Interestingly, its statement placed a heavy emphasis on the fact that this also extends to affiliates, with a reminder that operators are responsible for their affiliates’ actions.

On the one hand, one might question whether operators still need such reminders, given the Licence Conditions and Codes of Practice (LCCP) have been clear for many years that operators are ultimately accountable for the actions of third parties such as affiliates. On the other hand, technology is evolving at such a rapid pace that there is increasingly the potential for new issues to arise in relation to affiliates.

There has also been intense scrutiny on marketing recently, particularly as the Gambling Act 2005 review continues. With many expecting some curbing of traditional advertising when the government’s policy is finally published, it’s only natural that some operators will have at least been thinking about increasing their digital marketing activity.

In an industry as digitally focused as online gambling, affiliate marketers are understandably keen to make sure they are utilising all the latest advertising methods, and indeed, operators rely on them to do so. However, operators cannot simply outsource marketing and forget about it. They need to make sure they maintain strong oversight of their affiliates, particularly in relation to social responsibility.

One area where problems could potentially arise is underage gambling, especially given the focus that has been placed on this topic during the review. Back in 2019, when the LCCP was changed to state that operators needed to verify players were over 18 to access free-to-play games, the Gambling Commission issued a warning about non-compliance, noting that some affiliates were still making free-to-play games available.

Similarly, the rise in the number of people commoditising their use of social media could see some affiliates breaching the rules that prohibit operators from targeting children with their marketing.

We are increasingly seeing people playing video games and streaming it on YouTube and other forms of social media; now some of those people are starting to stream their engagement with gambling sites.

Many of these gamers have young audiences and that is a potential problem because Advertising Standards Authority (ASA) guidance states that gambling must not be targeted towards or be appealing to underage individuals. This may be a question of fact but where this is not immediately clear, the ASA identifies that the protected demographic (underage individuals) must not form more than 25% of the audience in receipt of the marketing material.

It may be difficult to ascertain the precise demographic breakdown of a YouTuber or gamer’s audience but, if questioned, operators need to be able to prove that they aren’t breaching this 25% threshold. Marketers also need to consider the nature and type of marketing used as it must not appeal to the protected group. This is also a consideration for celebrity endorsements as particular individuals may have a broad appeal, which inadvertently reaches a younger audience.

Open and transparent

A sometimes overlooked part of the LCCP is that it states that operators must require third parties such as affiliates to provide any information required “to enable the licensee to comply with their information reporting and other obligations to the Commission”. The Commission could ask for documentation about who an operator markets to and operators need to ensure they can provide information not only about their own marketing, but also that of their affiliates.

Licensees must also ensure that any third-party contract requires those entities to conduct themselves as if they were bound by the same licence conditions and subject to the same codes of practice. This is, of course, limited to only those activities carried out on behalf of the operator.

Another potential area of concern is operators integrating with affiliate platforms that see users presented with popup boxes (iFrames) that integrate with gambling sites. The platform might provide general commentary on sporting fixtures and odds, which is not itself a licensable activity. It needs to be made very clear to consumers when they stop interacting with that non-licensed platform and move to gambling on a licensed operator’s website.

The increasing blurring of these lines leads back to the much-debated question of whether affiliates themselves should be licensed; especially given that’s the way the market is evolving in the United States. Such changes could require marketing affiliates to age gate their own platforms, although this may be a step too far and ultimately stop marketing through those sites. The licensing of affiliates would likely require legislative change and at the moment the Gambling Commission may not have the resources to oversee the wider marketing industry. For now, at least, the responsibility of overseeing affiliates remains firmly with operators, to ensure compliance with the LCCP and ASA’s codes of practice, and this is an obligation they must take seriously.

Richard Bradley is a member of the gambling (betting, gaming and lottery) team and advises clients on various aspects of licensing law including operating, personal and premises licences. He has assisted in the development of bespoke compliance regimes for operators under the Gambling Act 2005. Bradley acts for a range of leisure operators from single premise owners to multinational corporations that provide land-based and online gambling services.