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.

What is user generated content?

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.

Who is liable for UGC?

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).

UGC gambling adverts hosted on a games platform

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).

Relevant offences

It is an offence for a person to:

• Advertise ''unlawful gambling'' (section 330(1) GA). Gambling is ''unlawful'' if, in order for it to take place as advertised without the commission of an offence under the GA, it is or may be necessary to rely on a licence or exception under the GA.
• Invite another person under 18 years of age to gamble (section 46 GA).

Advertising "unlawful gambling" (section 330(1) GA))

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:

• They act in the course of a business of delivering, transmitting or broadcasting communications (in whatever form or by whatever means) or making data available.
• The nature of the business is such that persons undertaking it have no control over the nature or content of the communications or data.

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.

Inviting another person under 18 years of age to gamble (section 46 GA)

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.

What to think about

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.

Practical steps

• Incorporate clear terms in terms of use for all users of the host's platform, including:
• Users are not permitted to post links to unlawful gambling ads.
• The host accepts no liability for UGC concerning gambling and does not endorse any gambling ads posted by users.
• When such unlawful ads/content are discovered, the host has the right to report the publisher/creator of the content and take it down immediately.
• Post a clear statement on the host's site (and in particular on channels) that any ad links/content are third party hosted content.
• Implement a policy whereby any employee (or user) can report inappropriate/unlawful gambling adverts when discovered (particularly where such adverts contain content that appears to make it look appealing for children).
• Possibly get in touch with the regulator directly (on an anonymous basis) for confirmation/clarification on some of the key questions, particularly given that there is no available guidance on how to deal with gambling adverts and UGC.

For general commercial advice on games sector-related issues, please contact Graham Hann or any other member of our international Games and eGaming team.