ElectraWorks fined £350,000 for misleading advertising and PML failure

It has just been announced that, as a consequence of an operating licence review, online gambling business ElectraWorks – part of GVC Holdings PLC, that is in the process of a proposed £4 billion takeover of Ladbrokes Coral – has been fined £350,000 by the Gambling Commission for repeatedly misleading consumers with advertisements relating to free bonuses.

ElectraWorks has also received a formal warning from the Commission for failing to ensure that the person responsible for marketing at the business holds a personal management licence (“PML”). Any individual placed in charge of a specified management office must hold the requisite PML as required by Licence Condition 1.2.1 in the Commission’s Licence Conditions and Codes of Practice (“LCCP). More information about PMLs can be found here.

The Commission states in its formal Decision Notice (that can be downloaded below) that:

  • “This decision notice provides valuable learning for all operators to ensure that, when promoting free bets or bonus offers, they must comply with the relevant requirements under SRCP [i.e LCCP Social Responsibility Code Provision] 5.1.7. This would ensure that consumers are not misled about the nature of free bets or bonuses which are being offered”.
  • “Any incoming personnel should have their PMLs granted when taking over the responsibilities of their specified management office and are urged to plan ahead. It is the responsibility of the applicant or the Licensee to check the progression of any applications”.

The background is reported on the Commission’s website as follows:

  • On 17 August 2016 the Advertising Standards Authority (“ASA”) upheld a complaint against ElectraWorks following the appearance of an advert offering a free bonus on its www.bwin.com website.
  • This breached Commission codes stipulating that all licensees must abide by any relevant provisions of the Committee of Advertising Practice (“CAP”) code and the Broadcast Committee of Advertising Practice (“BCAP”) code, which relates to ‘free bet’, ‘bonus’ or similar offers.
  • A week later (24 August 2016) the Commission discovered another advert on the Bwin website which breached the same code. After being alerted to this, ElectraWorks removed the advert.
  • In April 2017 the Commission discovered six similar breaches on its casinoking.com, casinolasvegas.com, noblecasino.com, partycasino.com, partypoker.com and scasino.com websites. In June 2017 the same breaches were subsequently found again on these sites. And in August 2017 a similar breach occurred on ElectraWorks’ casinolasvegas.com website.

Richard Watson, Commission Programme Director, is reported as saying: “This fine should serve a warning to all gambling businesses that we will not hesitate to take action against those who mislead consumers with bonus offers or fail to ensure they are correctly licensed.”

We await to see whether other operators face similar sanctions, arising from the joint efforts of the Competition and Markets Authority (CMA) and the Gambling Commission to improve conditions for players gambling online.  The CMA announced on 1 February 2018 that three leading operators had formally committed to change how they offer bonus promotions to ensure that players can always access and release their own money. The Commission has made clear that all operators should adopt similar changes, in the main by 28 February. More recent information in this respect can be found in our website posting here.

It will assist all affected operators to read the ASA’s following 17 August 2016 ruling that upheld a complaint that an advertisement on the www.bwin.com website (including a page headed “£30 WELCOME BONUS!”) omitted significant terms and conditions and was misleading:

  • “The ASA considered that the prominent header “£30 WELCOME BONUS!” and further text below detailed the steps to receiving the bonus, meant consumers would expect that once they had deposited at least £10, they would receive a matched bonus amount of up to £30. The text “Receive your Welcome Bonus” emphasised the impression that the bonus amount would be received immediately and we considered that the average consumer would expect to be able to bet with it straight away.
  • We considered the fact that users were not able to release the full bonus until they had wagered six times their original deposit amount was significant material information which was likely to influence a consumer’s decision of whether or not to take up the offer. The significance of this condition to consumers meant it should have been clearly stated in the main body of the ad, rather than only in the T&Cs, even where those terms and conditions were shown in full on the same page. Because the wagering requirement was not stated sufficiently clearly we concluded the ad was misleading”.

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