Enforcement report 2018/19
Marketing and advertising - case study
We identified that LeoVegas or its affiliates published 41 website advertisements between April 2017 and January 2018, and of these:
- 31 failed to state significant limitations and qualifications relating to promotions, despite there being space to do so (eight on its own website and 23 on affiliates’).
- 10 misled consumers, as the information needed to make an informed decision was presented in an unclear manner, contrary to CAP code 3.3.
This does not comply with the requirements in social responsibility code provision 5.1.7(2) and 5.1.7(2)(a) which states:
- Licensees must abide by any relevant provision of the CAP (UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code)) or BCAP (UK Code of Broadcast Advertising (BCAP Code)) code, as the case may be, which relates to ‘free bet’, ‘bonus’ or similar offers and in that regard follow the CAP and BCAP ‘Guidance on the rules for gambling advertisements’. In particular that:
- marketing communications (which include advertisements) must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
Further, social responsibility code provision 1.1.2(1)(a) states:
- Licensees must take responsibility for third parties with whom they contract for the provision of any aspect of the licensee’s business related to the licensed activities and ensure that the terms on which they contract with such third parties:
- require the third party to conduct themselves insofar as they carry out activities on behalf of the licensee as if they were bound by the same licence conditions and subject to the same codes of practice as the licensee.
These instances came despite:
- relevant rulings by the Advertising Standards Authority in March and July 2017 concerning breaches of the CAP code
- repeated engagement by us explaining the requirements of social responsibility code provision 5.1.7, the CAP codes and LeoVegas’ responsibility for affiliates
- assurances from LeoVegas’ senior members of staff that the issues were being remedied.
LeoVegas acknowledged the breaches of these requirements and has implemented changes and improvements to processes and procedures to address these breaches. These include:
- review and revision of all policies and procedures relating to marketing compliance, in order to ensure compliance
- recruitment of a marketing compliance officer in both legal and affiliate teams
- training programme for marketing personnel, including CAP rules
- compliance approval of marketing as part of the sign off process
- actively seeking CAP advice as appropriate
- limiting the number of affiliates and excluding email or SMS messaging
- improving affiliate processes around on-boarding, breaches and terminations
- overhaul of affiliate terms and conditions
- affiliate training on compliance obligations through an information programme and guidebook
- compliance audits on affiliates to identify and remedy any issues revealed.
This case was resolved through a regulatory settlement, which also included issues relating to their management of self-excluded customers. Leo Vegas made a payment in lieu of a financial penalty of £600,000.
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