Business Law: Don’t gamble when it comes to compliance with the advertising code, says Victoria Spellman
- Credit: Archant
Advertising is crucial to the lifeblood of any business but if you fail to play by the rules the punishments can be severe.
A recent case involving four betting companies is a case in point. The quartet are all facing possible fines over adverts disguised as news articles that targeted vulnerable people.
The Advertising Standards Authority (ASA) upheld complaints against the firms over the adverts, which were placed by “affiliates” – agencies paid to direct gamblers to online casinos and bookmakers.
Affiliate marketing is a form of advertising where publishers post tracker links on their website and earn cash when their readers click on them and buy something. Affiliates operate at arm’s length from the brands they are representing, often separated by at least one or two intermediaries.
In this case, the four betting businesses said they did not approve or condone the adverts, but the ASA held them responsible because they stood to benefit from them.
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One of the ads referred to a man who was heavily in debt after having to sell his house to cover his wife’s medical bills. The ad, which the ASA said “targeted vulnerable people”, stated the man had won 30 times his annual salary in a single spin on an online gambling game.
The watchdog said the adverts breached the UK non-broadcast advertising code because they suggested gambling “could provide an escape from personal problems such as depression and that it could be a solution to financial concerns”. It also ruled that the adverts gave the incorrect impression that they were genuine news articles.
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Meanwhile, the Gambling Commission, which regulates gambling in Great Britain, has warned that businesses must take action to ensure they have a clear view of what affiliates are doing on their behalf.
So what could it mean for your business? The warning from the ASA is clear: businesses must take care over who they recruit as affiliates and accept ultimate responsibility for the content of their adverts.
If you have an affiliate network, it is worth checking the adverts which are being created and making sure they comply with the UK code.
•Victoria Spellman is a partner specialising in commercial law at Gotelee Solicitors. For further information on the issues raised in the article, call 01473 298181 or email Victoria.firstname.lastname@example.org.