Advertising in iGaming – Will we See a UKGC Clampdown?

Posted by Harry Kane on Tuesday, October 13, 2020

The issue of marketing in the iGaming market has been discussed widely of late, particularly in the form television and digital advertising.

It’s also come under increased scrutiny once again this month, after the UK Advertising Standards Authority (ASA) found sponsored messages from four iGaming operators on so-called ‘child-friendly’ sites in Q2 2020.

In this post, we’ll explore this news story in further detail, while asking whether advertising in the world of iGaming could soon come under regulatory fire.

What Have Been the Recent Findings of the ASA?

In total, a collection of 70 ads from the quartet of unnamed operators appeared across eight different websites, which were classed as being part of children’s media.

These advertising breaches were discovered as part of the advertising watchdog’s most recent online monitoring sweep, which is regularly used to identify and challenge age-restricted promotions as a way of protecting undersage gamblers.

This sweep is also part of a year-long project managed and driven by the ASA, which continues to monitor ads served on a sample of more than 50 child-friendly websites and YouTube channels.

Once inappropriate messages have been identified (as in this case), the ASA then contacts the advertisers to request the removal of the offending adverts and take steps to prevent further breaches in the future.

Repeated breaches can result in fines or further sanctions over time, although it’s not yet known whether the four brands in question have shared ad messages amongst underage audiences previously.

“The ASA is using technology to proactively monitor online ads to help build a culture of zero tolerance for age-restricted ads appearing on websites aimed at children,” said Guy Parket, who works as the chief executive of the ASA.

“We expect advertisers and the parties they contract with to use the sophisticated tools available to them to target their ads responsibly.”

The concern here is that we’ve seen repeated breaches within the iGaming industry over the course of the last year, while the recent discovery of 70 different gambling-related adverts across the target sites represents a significant and worrying haul.

This may also suggest that the situation is getting worse rather than improving, as operators continue to target underage gamblers and increase the risk of problem behaviour in those aged between 11 and 16 in particular.

The Issue of Problem Gambling Amongst Underage Players in the UK

The concern surrounding these findings is also being exacerbated by the perceived extent of problem gamblers who are underage in the UK, with the number of children classed as showcasing signs of addiction having quadrupled between 2016 and 2018 alone.

More specifically, this number soared to more than 50,000 by Q3 2018, with a staggering 450,000 kids aged between 11 and 16 also known to wager regularly (both between themselves and across an array of on and offline channels).

This number is far higher than those who have taken drugs, smoked or drank alcohol during the same period, suggesting that gambling represents the biggest social challenge facing children in the digital age.

In the age of social media, we’re also seeing children exposed to gambling-inspired games and messages at an increasingly young age. For example, you can open a Facebook account from the tender age of 13, while simultaneously accessing social games that are inspired by disciplines such as poker and roulette.

Kids can also access resources such as YouTube and the type of websites referenced as part of the regular ASA sweep from a similar age, potentially providing a transition into real-money gambling that leads to the demonstration of problem behaviour.

Of course, the UK Gambling Commission (UKGC) has taken proactive steps to safeguard youngsters, primarily by tightening the online registration process and prohibiting operators from accepting deposits and wagers before a player’s identity and age has been verified.

The Know Your Customer (KYC) legislation developed in the EU has also helped in this respect, by creating a clear set of guidelines and responsibilities for operators to adhere to when looking to verify the identity and suitability of new registrants.

Could Legislation be Required in the Future?

These steps alone are not enough to adequately protect youngsters, which is why both the regulator and the ASA are continually observing advertising behaviour and striving to limit childrens’ exposure to gambling-related material.

However, there remains a real risk that legislation will be required and compelled by the government in the near-term, especially given the pressure being applied by anti-gambling lobbyists and the continued failure of brands to control their advertising output and messaging.

This topic has already been given consideration by the All-Party Parliamentary Group (APPG) for gambling-related harm, which has proposed a complete and total advertising ban across both offline and digital channels. This represents a dramatic intervention that would have a huge impact on the iGaming space, and the very least it should prompt a definitive response from operators and regulators alike.

This issue raised its head towards the end of 2018, following a report which revealed that both kids and problem gamblers were exposed to more than 90 minutes of sponsored gambling messaging during the Russia World Cup.

The majority of these adverts were broadcast pre-watershed in the UK, creating a huge issue in terms of accessibility and the reach of iGaming brands.

In response (and under increased pressure), many of the UK’s leading iGambling brands agreed a blanket advertising ban across all live sporting events broadcast before the watershed. This was welcomed at the time, although some noted that operators spend an ever-decreasing amount on TV advertising each and every year.

More specifically, TV ads accounted for just 15% of the total iGaming ad spend in the UK as recently as 2017, whereas investment in digital, social and affiliate marketing channels was responsible for well in excess of 50% of the total spend during the same period.

The digital marketing spend has continued to increase its market share since, meaning that operators have happily agreed to a blanket TV ad ban while simultaneously focusing their attention on more lucrative channels.

This could be interpreted as a wilful decision to ignore the real advertising challenge in the market, while the continued findings of the ASA and the rise of underage gambling in the UK could ultimately force the government to legislate.

This may still be something that operators can avoid going forward, but proactive and serious action is required if the government is to be persuaded that the market can effectively regulate itself from the perspective of advertising.