Will the UKGC Regulate Online Advertising in 2019?

Posted by Harry Kane on Thursday, January 31, 2019

Recently, it was announced that prominent gambling brands like Ladbrokes and Paddy Power had agreed to a voluntary and whistle-to-whistle ban on advertising during live sporting events. This will be enforced during all pre-watershed broadcasts, as brands look to take a proactive stance before regulators impose their own restrictions.

From a cynical perspective, however, it can be argued that this is little more than a symbolic gesture that seeks to curry favour with the UK Gambling Commission. The reason behind his cynicism is simple; as an estimated 80% of all gambling advertising is published online while brands have made a concerted effort to reduce their TV spend in recent times.

The UKGC is aware of this challenge, however, having recently seen influencers on YouTube and Twitch come under fire for promoting gambling brands to young viewers. We’ll explore this further below, while asking whether or not the Commission will look to regulate digital advertising in the future?

Why Have YouTube and Twitch Influencers Come Under Fire?

Across all countries and markets, the digital advertising spend has increased exponentially during the last decade.

In fact, the global spend peaked globally at around £11.9 billion in 2018, with this number set to increase incrementally in the years ahead.

This trend is particularly relevant in the iGaming sector, where brands are leveraging numerous digital channels to promote their products and thrive in an exceptionally competitive market.

This includes the use of social media influencers through sites such as YouTube, Twitch and Instagram, although this popular marketing technique has been at the centre of some controversy recently. Earlier this month, popular YouTubers came under significant fire for promoting a number of controversial gambling games online, using sponsored messaging to target young and potentially vulnerable punters.

Popular influencers Jake Paul and Brian “RiceGum” Lee are at the centre of this controversy, following their decision to post sponsored videos that showed them spending money on so-called loot boxes.

The pair, who boast around 28.5 million subscribers between them, were filmed clicking on various mystery treasure chests, before they announced that they had won a number of lucrative, real-life objects including Apple AirPods and trainers worth £1,000.

In fundamental terms, loot boxes appear in video games and prompt players to spend real money in exchange for random in-game purchases.

However, while the use of real cash and the opportunistic nature of loot boxes has created genuine concern among regulators in Europe and even triggered a ban in Belgium and the Netherlands, the UKGC has so far refused to intervene as they do not believe that they fit the existing description for licensable gambling activity.

More specifically, loot box prizes are only usable in the games in which they’re won, while the fact that they cannot be cashed out has also discouraged the Commission from taking direct action.

MysteryBrand were behind the most recent marketing videos, as they looked to promote corporeal boxes that can cost anywhere between £3.99 and £1,028.00 each. These contain a range of pre-selected items, the value of which is determined by the retail cost of the box.

This controversy followed hot on the heels of another investigation by Eurogamer, which explored the publication of several promotional adverts for at least two unlicensed casino platforms on the streaming channel Twitch.

Using Twitch, influencers shared videos that promoted unregulated and largely unsafe casino sites, using both images and video descriptions including hyperlinks. This enabled streamers to access these rogue sites directly and wager their hard-earned cash in an unsecure environment, with minimal barriers to entry or age verification measures.

This issue has become increasingly prevalent in recent times, thanks to the popularisation of Twitch’s fast-evolving casino game category.

In fact, a number of high profile casino games and platforms regularly received a higher frequency of views than casino titles such as Red Dead Redemption 2 in 2018, creating an opportunity for marketers to target a huge potential audience with compelling calls-to-action.

In both of these instances, the primary issue lies with the potential age of streamers active on both YouTube and Twitch.

Both of these platforms enable people to register for an account from the tender age of 13, and while the rules of Twitch stipulate that users under the age of 18 should be accompanied by an adult, such guidelines are extremely hard to enforce or police on a daily basis.

This is creating a scenario where casino brands and influencers can directly target underage and potentially vulnerable gamblers online, in a generation that’s increasingly exposed to gambling through a variety of accessible channels.

At the end of 2017, it was estimated that around 25,000 children aged between 11 and 16 were problem gamblers, with many of these targeted through console games and casino-themed social media titles.

With iGaming content also becoming increasingly popular on platforms such as Twitch and YouTube, this is emerging as a major social issue that remains under almost constant review by the UKGC.

The Last Word – Will the Commission Move to Regulate this Space?

While there’s no doubt that the move to voluntarily ban advertising during live sporting events has been welcomed by regulators, the concerns about the effectiveness of such a measure are extremely valid.

After all, operators continue to spend the vast majority of their ad spend online, while many have made the conscious decision to reduce their TV advertising budget as the behaviour of customers has continued to evolve.

The World Cup in Russia also saw gambling brands struggle to engage their audience through television advertising (particularly when compared with similar marketplaces), forcing many to adapt their marketing strategies and increase their online spend.

Beyond this, it’s also important to consider the accessible nature of digital channels such as social media, which enable operators to target a vast and largely unrestricted audience that includes a raft of users who are below the legal gambling age.

These platforms lack the robust safeguards and age verification measures imposed by the UKGC, while they operate in a largely unregulated space that often blurs the lines between licensed and unlicensed casinos.

So while the Commission has so far refused to regulate loot boxes or the accessibility of casino and gambling-inspired games on social media, there’s every chance that it will review its position in 2019 and take proactive steps towards safeguarding its most vulnerable customers.