Supplementary memorandum from the Advertising
Standards Authority (DGB 155)
INTRODUCTION
The Advertising Standards Authority (ASA) and
the Committee of Advertising Practice (CAP) are responsible for
maintaining the highest standards in non-broadcast advertising
in accordance with the British Code of Advertising, Sales Promotion
and Direct Marketing. The CAP Code (the Code) applies to all non-broadcast
marketing communications in the UK, covering such media as print,
posters, sales promotions, direct mail, SMS and internet advertising.
The Code, adjudicated by the ASA, requires all
marketing communications to be "legal, decent, honest and
trustful". They should be prepared with a sense of responsibility
to consumers and society, and should respect the principles of
fair competition generally accepted in business. The Code, and
the ASA's interpretation of it, is the standard to which all organisations
involved in non-broadcast advertising in the UK defer. Although
the system is non-statutory, participation in it is mandatory
by virtue of the agreement of advertisers, agencies and media
to maintain common standards.
More information about the ASA and CAP is available
on their respective websites, www.asa.org.uk and www.cap.org.uk.
We welcome the opportunity to contribute to
the DCMS consultation on the draft Gambling Bill, but preface
our response by noting that the specific clauses of the Bill dealing
with the regulation of advertising had still to appear at time
of writing. The remarks that follow are, therefore, based on the
Bill's policy instructions (9 April 2003) and the more recent
Draft Gambling Bill Policy Note 6: Advertising of Gambling (5
February 2004).
This response is submitted jointly on behalf
of the ASA and CAP and confines itself solely to those parts of
the Bill that deal with the future regulation of betting and gaming
advertising.
SUMMARY OF
POSITION
In our comments on the Budd Report (2001), response
to the Gambling Bill policy instructions (2003), and submission
to the Joint Committee on the Gambling Bill, the ASA and CAP have
stressed the need to avoid regulatory overlap, duplication of
complaint handling mechanisms and double jeopardy in the future
regulation of gambling advertising. We are heartened to see recognition
of many of these concerns by the DCMS in Policy Note 6.
We further support the broad policy objective
of the Gambling Bill to recognise gambling as an acceptable leisure
activity, if one that does potentially give rise to acknowledged
risks. It is right, therefore, that the advertising of gambling
should be subject to effective codes with genuine sanctions available
to regulators where breaches occur.
We understand from Policy Note 6 that the precise
mechanisms through which the advertising of gambling will be regulated
are still to be finalised. Some reservations about this continued
uncertainty aside, we welcome the status granted to the ASA in
paragraph 19, and the intention therein to avoid overlap and inconsistency
in regulation, and provide flexibility for co-regulation—with
the Gambling Commission remaining as the statutory backstop—with
a partner robust enough to ensure necessary standards.
SPECIFIC REMARKS
In our previous submissions to government regarding
its gambling reform proposals we accepted whole-heartedly the
need for adequate and appropriate controls to exist with regard
to the administration and licensing of gambling. We were, however,
unpersuaded of the need for the Gambling Commission to create
a separate advertising code and establish a parallel complaints
investigation system under the Commission, as the Policy Instructions
of April 2003 appeared to suggest.
We argued that the development of sector-by-sector
advertising regimes would be contrary to the interests both of
consumers and fair competition, and inimical to the effective
maintenance of consistent standards. Indeed, we considered that
the construction of a parallel code and adjudicatory process was
likely to raise issues of double jeopardy, and create significant
uncertainty for consumer and business alike as to the division
of responsibility across regulators.
Further, the duplication of structures and purposes
seemed to us very much contrary to the intent of government and
expressed by the Better Regulation Task Force and its principles
of best practice regulation.
We welcome the assurance given in Policy Note
6 that the Gambling Bill should avoid overlap or inconsistency,
and ensure so far as possible that those responsible for advertising
were not subject to duplication of regulation (para 19).
The Policy Note is also correct to identify
the content of Codes as fundamental to the maintenance of appropriate
standards in the advertising of gambling, or indeed any other
product or service. As the DCMS is aware, the CAP Code contains
a section dealing specifically with betting and gaming—reflecting
current legislation about the advertising of gambling—and
we have consequently developed a significant expertise handling
complaints on this issue. We point out also that the CAP Code
covers a range of issues not specific to gambling—for example,
decency, honesty and social responsibility—but which may
apply to betting and gaming advertisements, and will not be dealt
with in the proposed Gambling Commission Code.
We do, however, recognise and support the objective
of the DCMS to ensure that relevant Codes be updated to reflect
the proposed changes to the regulation of gambling, and anticipate
a constructive dialogue with the Gambling Commission on this issue
as we co-operate in delivering the necessary level of consumer
protection for the advertising of gambling.
This aside, some uncertainty remains about
the scope of the "technical" matters the Bill seeks
to reserve for the Commission. Although we acknowledge the logic
behind reserving "technical" matters, the practicalities
of this for the relationship between regulatory bodies should
be further examined.
A further anomaly regarding Code ownership and
enforcement bodies appears to arise in respect of broadcast Codes.
Paragraph 15 of Policy Note 6 states "the policy is that
regulations will not apply to broadcast advertising which can
effectively be regulated by Ofcom under the Communications Act
2003. Ofcom would be expected to consult the Gambling Commission
in preparing or amending codes insofar as they relate to gambling,
and to have a duty to reflect the general effect of the Commission's
requirements on its own licensed operators". In this connection
we draw the Department's attention to the recent Ofcom consultation
on the future regulation of broadcast advertising. Although a
decision on this has yet to be made, Ofcom is proposing to contract
out responsibility for the regulation of broadcast advertising
in a co-regulatory partnership with a new self-regulatory regime
under the banner of the Advertising Standards Authority.
Under this proposal, ownership of the broadcast
advertising Codes will transfer to an industry body, the Broadcast
Committee of Advertising Practice, although Ofcom will retain
a power of recommendation and veto over changes to that Code.
You will note that the trend here is towards the convergence of
advertising regulation rather than its fragmentation, whereas
Policy Note 6 suggests the opposite: the emergence of significant
differences between the regulation of gambling advertising in
broadcast and non-broadcast media. Although the DCMS is correct
to note—and the proposed legislation should acknowledge—the
existence of a licensing regime for broadcast media, it is not
clear that the implications of this for the regulation of gambling
advertising as a whole have been fully considered.
We fully accept that the Gambling Commission,
as the proposed licensing body for all legal gaming services,
must act as the effective backstop enforcer where no other is
present. Non-broadcast advertising is one such sphere. We welcome
also the assurance in paragraph 19 of Policy Note 6 that the Bill
should provide flexibility for co-regulation on the non-broadcast
sphere but question the appropriateness of the backstop model,
that of the Financial Services Authority, the Bill proposes to
utilise. That said, Policy Note 6 is an encouraging start and
we look forward to further constructive discussions with the DCMS
and Gambling Commission on the detailed mechanics of gambling
advertising regulation.
February 2004
| 
