5 March 2019
TW Play – 6 of 9 Insights
Gambling adverts will soon no longer be allowed to appear on websites or in games that are popular with children, under new rules published by the Committee of Advertising Practice (CAP) which are designed to protect children from irresponsible gambling adverts.
The new rules, which come into effect on 1 April 2019, mean that UK games businesses in particular will need to be mindful of any user generated content posted on their platforms which advertise and/or link to third party gambling sites. A common scenario that we have come across, and which we focus on below, is the hosting of gambling adverts that are posted to a gaming platform by users and associated gambling law implications.
User generated content (UGC) includes any form of content (eg images, videos, text and audio) that is posted by users on online platforms, such as social media or forum functions. It is becoming increasingly common for games platforms to have UGC systems integrated into games and to also allow users to post UGC in chat forums or pin adverts to the platform.
The legal position of an individual who posts content on a games platform (eg a website) is clear; they are responsible for it. The situation is more complicated when it comes to a games business whose website publishes UGC.
Provided an operator is unaware of the infringing or illegal content and has an effective notice and take down procedure in relation to such content (under which it promptly removes infringing or illegal content from the site once on notice of it), it can probably rely on what are known as 'safe harbour' provisions available to "information society services" under EU legislation, without the need to monitor users' posts.
These 'safe harbour' provisions include what is commonly known as the hosting exemption under the Electronic Commerce Regulations 2002 (Regulations).
The hosting of UGC adverts that link to third party eGaming sites (that are not licenced in the UK by the Gambling Commission) may constitute the commission of offence(s) by a website operator under the Gambling Act 2005 (GA).
It is an offence for a person to:
There is a defence under section 330(6) GA, which states that a person does not commit an offence under section 330(1) GA by reason only of delivering, transmitting or broadcasting a communication or making data available if:
The principle under this defence is similar to the hosting exemption under the Regulations, but could offer an additional overlay of protection for a games website operator in these circumstances. As there is no guidance/case law available on the application of the section 330(6) GA defence, a common sense approach should be adopted. Aggravating or mitigating factors we think would be similar to those behind the hosting exemption are set out below.
A high degree of prominence and permanence of the adverts, making it more difficult to argue the lack of control on the part of the website operator.
The website operator makes it clear in its terms that users are not allowed to post links to unlawful adverts.
The website operator provides formatting/design services or in any way facilitates the presentation/functionality of the adverts which could illustrate a level of control.
It is clear on the site that the content has been pinned/posted by users and that it is third party hosted content.
Receiving remuneration via clicks on the relevant advert post.
The website operator does not receive any remuneration via clicks on the relevant advert post.
Ignoring any requests for take down of adverts/not acting promptly.
The website operator promptly responds to complaints/take down requests in relation to the relevant advert.
If in any way it appears that the website operator is approving the adverts.
The website operator does not moderate any of the content/adverts.
If the website operator in any way moderates the UGC.
The website operator does not participate in and has no control over the content of the post or user.
Clearly, a user posting the gambling advert may be committing this offence. However, whether a website operator would be held liable would depend on the content in question, the particular circumstances of the case and the interpretation of section 46 GA.
There are no defences to the offence set out in section 46 GA, but there is a possibility that the hosting exemption could apply if a website operator were found liable. The Regulations do not apply to various activities of "information society services", including "betting, gambling or lotteries which involve wagering a stake with monetary value".
We consider that this does not expressly rule out that the Regulations (and hosting exemption) will apply to a games platform that hosts UGC gambling adverts (provided that the activities available on the platform itself do not involve gambling). The possible applicability of the hosting exemption would need to be explored on a case by case basis.
UK games businesses need to give careful consideration to the way in which users are permitted to post content on their platforms. Getting it wrong may result in penalties under the GA for breach of section 330(1) and/or section 46, including imprisonment and/or fines. Compliance actions may also be taken by the Gambling Commission and/or the Advertising Standards Authority which may result in the publication of sanctions and subsequent reputational issues.
From a legal point of view, a decision to moderate UGC 'lightly' is likely to be the worst option. The hosting exemption is unlikely to apply and the website operator may be held responsible for the UGC over which it has no real control. If effective procedures are put in place to remove illegal content as soon as it comes to the website operator's attention, the decision not to moderate is often the better option.
For general commercial advice on games sector-related issues, please contact Graham Hann or any other member of our international Games and eGaming team.
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