Abstract
Gambling advertising continues to be a contentious sector in various jurisdictions across Europe, especially at a time when technological advances have made gambling easier and more accessible to players (as Internet usage is nowhere near saturation point worldwide). In this context and in such a highly competitive market, where operators are developing more captivating, varied, and state‐of‐the‐art virtual gambling opportunities to seduce an ever‐growing market, there are voices which claim advertising is a possible stimulus to increased gambling and, therefore, a contributor to problem gambling. This is by no means new, as gambling advertising has always been a sensitive subject, taking into account the need to ensure prevention of gambling addiction and limit potential social implications that gambling could have on minors and other vulnerable people.
While it is only logical that such a large industry with broadening appeal and an increasing rate of use would have some non‐uniform effects on its participants, ultimately, it is all about the consumers and providing them with a safe and legitimate pastime. As such, regulatory developments are high on the agenda in each jurisdiction where online gambling has been liberalized. One thing is for sure: proper rules are a necessary component of a market, particularly within an industry that offers products and services that might cause addiction. But in the end, it is all about finding the right balance and the right culture to deliver compliance.
Self‐regulation in gambling advertising seems to have been adopted by several European jurisdictions (Belgium, Malta, Italy, UK). The UK system of self‐regulation, with the Advertising Standards Authority as its public face, has come a long way from its very beginning, evolving into a comprehensive one‐stop shop for regulating marketing communications, both broadcast and non‐broadcast. It is also the most vocal system in terms of increased scrutiny of regulations and the regulator's purge of faulty and socially irresponsible advertising.
The UK Gambling Commission slapped several monstrous fines on UK‐facing operators on an ongoing basis for misleading advertising content, as well as for operators' failure to prevent their affiliate partners from violating advertising codes when promoting their brands. This resulted in several operators closing down their affiliate programs or limiting the number of affiliates they would work with in the future. A seismic decision sent ripples throughout the industry when Sky Betting and Gaming (known to be one of the UK's largest gambling operators) ended its UK affiliate program in early September 2017. Other operators followed shortly afterwards: Paddy Power Betfair announced a “one strike policy” whereby a single breach of internal policy by an affiliate will result in its engagement being suspended, and 888 and Ladbrokes also decided to scale back their affiliate programs. With a view to comply with the increasing standards on advertising and consumer protection in the UK, LeoVegas has also informed its affiliates that they would only work with a select few UK‐facing partners.
In the European context, Romania stands out by far. In a young industry, where online gambling surfaced only after the market was liberalized in the last quarter of 2015, Romania has introduced business‐to‐business (B2B) licenses for marketing affiliates, and remains the only one to this present date. There continues to be a real appetite for self‐regulation and the development of common standards for gambling advertising in Romania as well. Both the primary and secondary Romanian gambling legislation provides for general principles to be observed in gambling advertising. Gambling advertisements must also comply with all the other applicable national laws on advertising, audiovisual communications, and consumer protection; however, past performance from the last couple of years showed that these are not sufficient.
A first initiative to pull back the industry from evolving in terms of implementing specific rules on gambling advertising was the appearance of a draft bill on a total ban on TV gambling ads. The bill envisaged gambling advertising to be permitted only within gambling premises and in specialized publications, and audiovisual commercial communications for gambling to be prohibited. This draft bill has prompted adverse reactions from both the market stakeholders and the Romanian Gambling Office (which expressed its opinion against it), given that television and digital advertising, including advertising offered through marketing affiliates, are the main channels promoting the gambling industry. After stalling in the Romanian parliament for almost two years, and being tacitly adopted by the Lower House of Parliament, the draft bill was recently rejected by the Senate (the decisional chamber) on February 19, 2018.
However, discussions on the topic of responsible gambling advertising have not stopped here. In December 2017, gambling TV commercials once again showed up on the radar of the National Audiovisual Council. On this occasion, the National Audiovisual Council issued a warning in relation to several betting and gambling TV commercials which were aired during time intervals accessible to children and which were thus considered to be in breach of the audiovisual principle regarding minors' protection. The National Audiovisual Council ordered the faulty gambling TV commercials to become compliant by January 1, 2018, by observing the legal requirements in terms of minors' protection. While the decision does not clearly indicate the restricted timeframe during which gambling TV commercials cannot be aired on Romanian TV stations, when the Council's argument is reviewed, it appears that such restricted interval is between 07:00 a.m and 23:00 p.m.
Against this background, the need for specific guidelines on advertising from the gambling regulator surfaced. To this end, the Romanian Gambling Office issued and published on its official website a code of ethics on responsible communication in gambling (“Ethics Code”) on February 14, 2018. The Ethics Code, a set of self‐regulatory norms on commercial communication in the field of gambling to which all gambling operators must adapt their practices according to the Romanian gambling regulator, was thus aimed to shift the balance from stringent state regulation to industry self‐regulation.
Whereas we are confident that the Romanian regulator's intent was to set some background rules viable from a commercial point of view, but at the same time ensure the protection of customers, the Ethics Code proved to be, at a first glance, more detrimental than profitable to the health and stability of the market. In our view, the Ethics Code in its current form could lead to some major restrictions in what concerns the advertising of gambling products/services.
For example, one of the rules established in the Ethics Code is that advertising “must not be made by use of famous persons such as models, actors, athletes—by using their presence or image,” which is contradictory with the gambling operators' practice so far and has never seemed to have been a real concern to the Romanian gambling regulator, neither under the former management nor under the new one, in power since March 2017.
To quote another provision in the Ethics Code, “advertising must be clear, must not be based on vague terms that may mislead or deceive players,” and the example used for explaining what could be a vague term to mislead or deceive players is “cash back x%—published without explaining exactly what does that mean.” Cash back is already a facility used heavily in the industry that is, one may consider, self‐explanatory and thus no additional clarifications are necessary. As such, one may think that gambling ads can no longer use terms commonly known in the industry or be as liberal as before, operators and affiliates alike must be much more prudent to the entire ads' display towards consumers. Therefore, bearing in mind that disclaimers and clarifying soothing words on the content of the ads, as well as responsible gambling messages must be included in the advertisement, this leaves little space for the actual advertising itself.
In terms of liability for faulty advertising, the Ethics Code is somehow trying to mandate clarity on the fact that liability may stand both with the marketing affiliates and the operators (which are the ones benefiting from the publicity). However, one may consider that strong support is envisaged in this Code for the operator to be the one that bears the main responsibility. In this sense, we point out the provision in the Ethics Code which commands that for publicity in the online environment, an active system of age verification must be implemented “through the operators' diligence,” which “must appear on the start page of the operators' websites or their partners (affiliates), regardless of the form of the agreement that forms the basis of their partnership.” The same situation is also provided when focusing on the advertising media, where, regardless of the channel used, the ad must be aired, “through the operators' diligence,” “during hourly intervals for which, in the case of that particular channel, assurances can be given that at least 90% of the audience is over 18 years of age or that the channel is intended exclusively for this age group.” Not clear what remains safe to air, coded channels perhaps?
Nevertheless, this Ethics Code may also be seen as an effort by the Romanian gambling regulator to press affiliates to be compliant. Unlike other European jurisdictions (such as UK, Malta, Denmark), where operators have generally been held solely responsible for the actions of their marketing partners, Romania is specific in that it requires affiliates to hold a license in order to provide marketing services to remote gambling operators. This would lead to the conclusion that, in case of breaching the gambling, advertising, and consumer protection legislation and acting against the terms agreed with the gambling operators, liability stands with the faulty affiliate or with the faulty affiliate also, depending on the particular case.
In any case, for now it seems that the Ethics Code continues to be a work in progress, where immediately after publication, the regulator called on the market for comments and discussions on the text. A Consultative Industry Committee meeting was held one week after the publication of the Ethics Code (on February 22, 2018) to discuss it, and the meeting was attended by the Romanian Gambling Office next to market stakeholders' representatives and industry experts. The conclusion remains that no obligation is imposed currently through this Code, and no sanctions will be enforced for breaches (at least for now). A specific mention will be posted on the Romanian gambling regulator's website that the Ethics Code has been posted for consultation purposes only, and it may well be that it is completely withdrawn from the website while it remains under consultation with the industry, which is to submit practical recommendations for amendments. It seems that these discussions and conclusions have already materialized: two days later, the regulator posted a notice on its official website saying that the Code has been published with a consultative purpose so that all parties involved in the gambling field, including players, can become aware of the regulator's concern on responsible communication in gambling and express their position (although no deadline was provided for proposing suggestions or amendments to the Code). In the same notice, the regulator mentioned the adoption of the Code by the operators was a forward approach and was supported by them.
At this point in time, the Romanian gambling regulator's initiative to issue the Ethics Code looks like the first in a series of efforts designed to assess whether gambling advertising can be disciplined and managed through industry self‐regulation before or instead of legislation being required. In any event, the move towards self‐regulation of gambling advertising in Romania (whose purpose is to maintain, in the best way possible, the integrity of marketing communications in the interests of both the consumer and business) is a welcomed step pointing in the right direction. As we see it, the Romanian online gambling market is at a maturing stage where it can learn from the mistakes of other jurisdictions and strive for changes that will make it better, more effective, and more attractive to operators.