A US “scratch card with purchase” promotion with an alternative free entry route led to a $245,000 pay out to settle enforcement action. The issue was just how well promoted that alternative route was. Could the same happen in Great Britain, and why might the position be different in Northern Ireland? Stephen Groom plays the game.
Topic: Promotion marketing
Who: A major US corporation
Where: New York
When: June 2008
Law stated as at: 29 August 2008
The New York Attorney General concluded a settlement with a substantial US corporation following complaints over an instant win game.
The bone of contention was the level of prominence given to the alternative free entry route ("AFER").
The mechanic of the promotion was the offer of a scratch card to consumers who bought the promoter's products, with the scratch card also being available without having to make a purchase, by writing in to the promoter.
The AFER was mentioned in the full promotion terms and conditions and in the advertising for the game, but the ads simply said that for more information on how to get a free game card, punters should either visit the promoter's website or its local offices.
Furthermore the full promotion rules were not displayed at all retail locations.
New York law specifically requires that full official rules are posted at all retail locations in which a promotion is being conducted.
The Attorney General also takes the view that as much information about an AFER must be given as in relation to the purchase route, wherever the purchase route is mentioned.
The corporation paid $245,000 to settle the matter.
Why this matters:
Could a promoter get into similar difficulty here in the UK? The answer is that with the same mechanic in the UK, an AFER would not even be necessary in Great Britain provided the products that had to be bought to qualify for the scratch-card were on sale at normal price.
In Northern Ireland an AFER would still be necessary as the Gambling Act 2005, which legalised "purchase to enter" promotions for the first time in Great Britain, did not change the law in N. I.
Whether the NI authorities would take as strict a position as the NY Attorney General is doubtful, however, provided the AFER was genuine, realistic and unlimited and was given reasonable prominence in all promotional material.
A UK promoter might encounter similar problems to the US corporation if the products to be bought were at an inflated price or if for example a premium rate phone call was needed to claim a prize apparently available after scratching the card.
Here the Gambling Act does impose strict AFER prominence requirements and the official "Explanatory Notes" to the Act even go so far as to suggest that the AFER is promoted with "equal prominence" to the payment route, a position not a million miles from that of the NY Attorney General!