In August 2006 the UK’s new gambling regulator consulted stakeholders on prize competitions and free draws. Its final findings will appear in June, but it disagrees so strongly with respondents on one issue that it has emailed them about it now. What is going on? Veena Srinivasan reports.
Topic: Promotion marketing
Who: Gambling Commission
When: April 2007
All those who responded to last year's Gambling Commission ("GC") consultation document on "Prize Competitions and Free Draws" recently received an email from the GC regarding the definition of "payment-to-enter" in relation to phone-in TV quizzes.
In this email, the GC explained that, in the context of what amounts to 'payment to enter' in respect to phone-in TV quizzes and, thus, whether a TV quiz will be regarded as a lottery or a free draw under the Gambling Act 2005 (the "Act"), it disagrees with many of those who responded to its consultation.
If a participant has to pay in order to take part in a quiz, this will be considered and, as such, will be subject to the restrictions within the statutory regime governing lotteries. However, free-to-enter quizzes will not fall within the lottery definition.
It transpires that respondents who produced or promoted phone-in TV quizzes considered that the alternative online method of entry provided, via an allocated website, satisfied the Act's rules for alternative methods of entry which save an otherwise pay to enter mechanic from being an illegal lottery ("AMOE Rules").
The crux of the GC's email is that it does not currently consider that in the context of most TV quizzes as currently configured, an alternative web entry route satisfies the AMOE Rules.
The Act's four limbed test for alternative methods of entry
The AMOE Rules are in Paragraph 8 of schedule 2 to the Act. They lay down a four limbed test, which otherwise pay to enter prize draws will have to satisfy in order to be considered free draws.
In the GC's current opinion, merely offering an alternative free web entry route, as an alternative to phoning in using a premium rate line, is highly unlikely to satisfy the paragraph 8 test.
Let's take each of the four requirements in turn:
a) each individual who is eligible to participate has a choice whether to participate by paying or by sending a communication.
The GC explains that many people do not have access to the web, particularly amongst sections of the community, for example older age groups, for which TV quizzes have most appeal. Therefore, the GC held that in many cases, large numbers of consumers will not have genuine choice between phoning in to participate and using the web to participate. However, the GC did concede that the individual circumstances and, in particular, the target audience must be considered in each case.
b) the communication mentioned in paragraph (a) may be [..] another method of communication which is neither more expensive nor less convenient than entering the lottery by paying.
Although the GC accepted that the alternative entry route will be no more expensive, it considered that a web entry could not be described as "no less convenient". In addition to the reasons set out under a), above, the GC felt that using a website to make an entry is likely to be less convenient than simply phoning is, as, for example, the participant's computer, if any, may well be in a different room to her/his television.
c) the choice must be publicised such that it is likely to come to the attention of all participants.
Based on its review of TV quizzes, the GC concludes that the free entry route is not promoted as frequently nor as prominently as the paid, phone entry route. Results of research conducted by the Independent Committee for the Supervision of Standards of the Telephone Information Services shows that, of those who watch Quiz TV channels, less than 50% were aware of the route and only 15% were used it.
d) the allocation of prizes should not distinguish between those entering by either route.
In the GC's view, only few who responded to its consultation provided any convincing evidence to demonstrate that their prize draw mechanics treated "free" entries and phone-in entries with equal dignity.
Why this matters:
By sending these emails in advance of June, when it is scheduled to produce its formal response following the consultation process, the GC appears to be tacitly acknowledging the huge impact that its current views will have on promoters and owners of phone-in TV quizzes if it is not persuaded to change its mind. It could potentially mean that such programmes might be regulated off our screens.
Online AMOE questions
But the more important message of this development for the marketing industry is that an online AMOE may not necessarily be the easy legal fix for otherwise pay to enter and illegal prize draws which the AMOE Rules seemed to offer. If the GC's position remains unchanged, it will be a question of looking at the practical implications in each case where online entry is the AMOE, taking into account factors such as the likely target audience and the ways in which entrants will actually be taking part.