2021 highlights

We thought we'd have more to say here because we were expecting the government to release a draft Gambling Act this year.  Deadlines came and went and, at the time of writing, it's still unclear when the Bill will be published. This doesn't mean it hasn't been a busy time for the sector and you can see our our 2022 predictions here.

Much of the Gambling Commission's activity this year focused on online harms and enforcement against those breaching social responsibility, anti-money laundering, and contractual transparency requirements (for example, In Touch Games was fined £3.4m in March).

CAP and BCAP guidance

CAP and BCAP focused on advertising of gambling and advertising in-game purchases.  In August, they put out an interim statement detailing the progress on their consultation on strengthening advertising rules and guidance on gambling ads to further protect under-18s and vulnerable adults.  Some aspects of the consultation are still being worked on and findings will be published by the end of the year.  In the meantime, CAP made some changes to its guidance from 1 November 2021 as well as technical updates to the Codes.

In October, we discussed CAP and BCAP's new guidance on advertising in-game purchases in apps and video games.  This guidance does not introduce new requirements but clarifies how the CAP and BCAP Codes apply to in-game advertising and storefronts to ensure that ads are not misleading. 

In November, CAP and BCAP published updated guidance on problem gambling.  The guidance took effect on 1 November although was published on 11 November.  There are no new rules but the guidance aids interpretation of s16 CAP Code and s17 BCAP Code.

The guidance now restricts ads that:

• present complex bets or other gambling products in a way that emphasises the skill, knowledge or intelligence involved that could therefore lead to erroneous perceptions of risk or control
• present gambling as a way to be part of a community based on skill (rather than for social reasons)
• state or imply that offers (eg money back, 'free bets', bonuses or enhanced odds) are a way to reduce risk.

Further guidance is also added on Immediacy and Urgency (4.3), Trivialisation (4.4) and Financial concerns (6.2)

Epic v Apple

In September, a court in Oakland California ruled that Apple cannot prevent in-app links to third party payment options.  Apple's app store terms prevent apps from redirecting users to payment options outside the app and Apple takes an up to 30% cut on in-app payments.  Epic Games challenged this, arguing that the app store was monopolistic and it harmed competition and consumers by requiring them to make purchases in the app, potentially not directing them to cheaper options which might be available.

The judge then held that there was insufficient evidence that Apple was monopolistic.  She did, however, issue a permanent injunction which took effect on 9 December, to stop Apple prohibiting apps from linking to their own purchase mechanisms outside their apps.

The decision is already being appealed by Epic and was partially appealed by Apple.  Epic has a similar case proceeding against Google. 

In a separate judgment, the court held that Epic had breached its contract with Apple by introducing an alternative payment method in its Fortnite app and said it must pay Apple 30% of revenue collected by the alternative payment mechanism.

In November, Apple's request for an indefinite stay against the order requiring it to let developers add links, buttons and external payment options was turned down.  Changes were required to be in place by 9 December.

The case obviously has wider relevance than just the games industry with other apps which provide in-app purchases welcoming the decision.

High Court case on exclusion clauses in online gambling terms and conditions

In April, the High Court granted summary judgment to a claimant seeking to recover winnings of over £1.7m from Betfred.  Betfred argued that the winnings were a result of a software defect and that their website ts and cs, EULA and game play terms excluded its liability to pay the claimant in such circumstances.  With respect to the various legal terms, the judge said that:

• the wording of the exclusion clauses did not exclude the liability to pay out as a matter of the natural meaning of the language in context
• even if the clauses had effectively excluded liability, the way they were presented, including their failure to adequately draw the reader's attention, meant they were not incorporated into the agreements
• even if the clauses had been adequately worded and incorporated into the contracts, they were not transparent in accordance with the Consumer Rights Act 2015.

As with any case on exclusion clauses, there is much in the decision which is fact specific, including the fact that the terms and conditions were riddled with typographical errors.  However, some of the main points are useful for anyone looking at terms and conditions for eGaming and include:

• The wording in the terms and conditions and EULA the defendants sought to rely on to exclude pay-outs was markedly different from wording used elsewhere reserving the right to void bets and did not cover the circumstances of the case.  In other words, they sought to rely on general and vague exclusions to catch a specific situation. The judge said it would have required a strained and unnatural meaning to make them cover the relevant liability.
• Failure to click a box accepting game rules did not prohibit entry to the game.
• The ts and cs and EULA did require agreement before a user could sign up but only on one occasion, in this case, years before the relevant game was developed. 
• None of the exclusion terms were sufficiently signposted and meaning and effect were not highlighted.  In particular, the presentation was unhelpful and often iterative in closely typed lower-case letters with numerous paragraphs of capital letters.  This had the effect of burying the relevant clauses.  Players also had to click through and scroll and search for elements relevant to the game.  This did not mean click-wraps are generally inadequate to form binding exclusion or limitation clauses, even in an online betting context, but they must be properly drafted and signposted. 
• The terms were not transparent or fair.  Nothing in the introductory wording suggested players were directed to a term which purported to allow Betfred to sweep away a player's winnings following bona fide play and the clauses suggested the game rules were about how to play the game rather than containing exclusion clauses.  The ts and cs were repetitive with absent or inconsistent numbering and typographical errors.  Players were required to scroll down and trawl repetitive pages to find clauses specific to the game they wanted to play.  The layout and terminology in the ts and cs did not make clear what game rules a player was supposed to agree to, nor where to find them.  Although capital letters were used, they were so liberally employed that they did not add any clarity, particularly at the start of the EULA.  The ts and cs were closely typed and ran to 24 pages when printed.  The suggestion that a player consult an attorney if in doubt as to the meaning of the contract was a "singularly ineffective" attempt to shift the burden of providing clear terms and conditions and exclusions.

You can see our predictions for the video games industry in 2022 here.