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Is it a Lottery or is it Gambling? UK Regulator Slaps Lottoland for Misleading Radio Ad

Posted in Sweepstakes and Lottery by on February 8, 2017
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Is it a Lottery or is it Gambling? UK Regulator Slaps Lottoland for Misleading Radio Ad

Gambling, including online gaming, lotteries, and land-based gaming, has tremendous participation in the United Kingdom.  One study concluded that 75% of the UK’s adult population gambled in some manner.  UK regulators take an aggressive approach to licensing, supervision, and enforcement of gambling laws and regulations, including gaming-related advertising.  As more U.S. states permit online gaming, UK regulators’ decisions about promotions will be instructive to state authorities in the U.S.  One recent decision by the UK’s advertising regulator involving Lottoland, a company that allows players to bet on the outcome of actual lottery draws (including U.S. Powerball) provides guidance concerning how an ad can come under fireLottoland, a leading online gambling operator in the UK, Sweden, Eastern Europe, Brazil, and other markets, allows players to bet on the outcome of lottery draws around the world, including MegaMillions, PowerBall and EuroMillions  In other words, players gamble on the outcome of a lottery rather than buy an actual lottery ticket. Players bet on official lotteries draws — specifically, which lottery balls, or numbers, will be drawn in those draws. Participants select the numbers that they think will be drawn.  If a player guesses correctly, she wins cash or other prizes. The amount of the prize depends on the number of balls correctly guessed.  Players can participate without having to visit an actual lottery retailer and do not need to retain a ticket. And, the Lottoland entry can be cheaper than an official lottery ticket.

ASA’s Decision

On 1 February, the UK’s independent regulator for advertising, the Advertising Standards Authority (“ASA”), ruled that a radio ad for Lottoland breached the UK’s Broadcasting Advertising Code (“BCAP”) provisions prohibiting misleading advertising.  Among the parts of the ad that raised concern was when the announcer stated “Chimp can’t believe it. At Lottoland the EuroMillions still costs just £2. Not £2.50. This Friday’s jackpot 100 million. So with Lottoland you can win the big jackpot for less. Download the app or go to lottoland.co.uk and get your first bet free.”  The ASA concluded that the ad implied that players would be playing in a lottery rather than betting on a lottery in a gambling game, primarily because of the announcement of the EuroMillions and the jackpot.  Among the violations was BCAP Code 3.3.1 which requires the “main characteristics of the product or service” be provided in advertisements when an advertisement quotes a price. The ASA was particularly influenced by the discussion of the jackpot and the dollar amount of 100 million.

The regulator acknowledged the mitigating factors that the ad also directed players to the Lottoland app/website and offered “your first bet free.”  The ad further referenced a gambling help website.  Lottoland asserted that their advertisements across all platforms clearly distinguish between its gambling product and an actual lottery ticket due to the key term “bet”- which the announcer stated twice in the radio ad.  Lottoland argued that in the context of the short script and other marketing, consumers would understand that Lottoland is a gaming operator, not a lottery company.  Lottoland further claimed that the reference to the lottery was a factual statement in that consumers can win the same amount of money by betting on the outcome of a lottery (and paying less to play with Lottoland).

The ASA reasoned however, that lottery-related terms were stated early in ad in a “high pitched tone,” giving them prominence. These included references to winning “the big jackpot for less” and “this Friday’s jackpot 100 million.”  Another factor deemed by the ASA to be indicative of a lottery was a reference to “Jackpot estimated 24 September.”  In viewing the radio ad in its entirety, the ASA concluded that the references to “bet” did not completely mitigate the references to lottery because Lottoland “did not make clear that consumers would be gambling on the outcome of a lottery rather than actually participating it.”  In the end, the ASA found that the references at the beginning of the ad promoting a lottery implied that participants would be playing a lottery rather than a gambling game.

Lessons Learned

The ASA’s decision is instructive for all online gaming operators and those offering promotions such as sweepstakes and contests. It makes clear that regulators will scrutinize advertising, particularly where the ad uses terms interchangeably that may confuse consumers.  While a radio ad tends to be around 30-60 seconds and thus does not leave much time for disclosures, gaming operators should review ad copy to make sure the copy accurately describes the offering – and does not have the potential to make consumers think they are participating in a different type of offering – such as a lottery, sweepstakes, or a traditional skill contest.

We frequently guide clients through the laws governing their promotions including online gaming, sweepstakes, contests, social media promotions.  Laws across jurisdictions vary greatly and each analysis is very fact-specific.  It isessential to ensure that promotional materials – whether in traditional media such as radio or TV and print, on websites, and on social media, clearly convey the type of offering and the key terms. The promise of a big payout may understandably result in additional scrutiny.

As Lottoland learned, while a bet may mean gambling, when you pair it with lottery references, consumer confusion may result.  Ad buys do not come cheap and air time is precious, so it’s best to keep it simple and clear.

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