On 14 August 2002 120 delegates attended the Osborne Clarke/Promotion Marketing Association Prize Promotion Law Forum, just 17 days before the end of the consultation period for current proposals to reform the laws in this area.
Topic: Games of chance and skill
Who: Osborne Clarke, the Promotion Marketing Association, the Department for Culture, Media and Sport and Others
When: 14 August 2002
120 delegates gathered for a 'Prize Promotion Law Forum' held by Osborne Clarke and the Promotion Marketing Association to coincide with the Government's consultation on proposed changes to the UK's laws affecting prize promotions. The keynote speaker was Chris Bone, Head of the Gaming Section of the Department for Culture, Media and Sport and those attending represented a wide range of interested parties including industry associations, big brand owners, marketing agencies and media owners. Stephen Groom of Osborne Clarke's Brandlegal chaired and set the scene by reminding delegates of current UK prize promotion law and recalling some notorious prize promotion cases. He then reported on the survey that had been conducted amongst forum delegates. A separate article on marketinglaw.co.uk reports on the results of this.
Caroline Griffiths of Intext Media focused on premium rate competitions and argued strongly against the adoption of some of the proposals of Summer 2001's Budd Report. In particular she expressed grave concern at the possibility of adopting a maximum cost level of 'twice the cost of a first class stamp', beyond which premium rate competitions might be unlawful. She was also worried about the possibility of retaining any statutory "degree of skill" requirement bearing in mind the ambiguities and uncertainties this might entail. She expressed anxiety also about the proposed new 'Gambling Commission' body dabbling in waters currently commanded in a tough but fair way by Icstis. All in all, her message to the Government was to seek to avoid ambiguity, prevent any confusion as to who was regulating what and to hold back from damaging what should be a thriving activity where Britain could lead the world.
Nicola Cumner of the DTI spoke of her own department's separate but to some extent parallel consultation on the proposed EU 'Sales Promotion Regulation'. This sought to harmonize various EU Member State rules affecting certain types of promotion, including prize related events. Nicola described the relatively slow process by which the EU had reached this point. She summarised such of the proposals in the Regulation as would affect prize promotions in the UK and the rest of Europe (a separate piece on the EU Sales Promotion Regulation consultation appears elsewhere on marketinglaw.co.uk). She emphasized how important it was that the industry should air their views and both she and Chris Bone confirmed that the DTI and the DCMS were in close contact so as to ensure that the two consultation processes were 'joined up' in their thinking. Nicola also drew attention to the fact that there were many stages in the process by which the proposed Regulation might eventually be adopted. We were currently at only stage two out of seven!
Chris Bone of the DCMS then took the delegates through the process by which we had arrived at the current consultation. He emphasized that nothing had been ruled in at this stage and nothing ruled out. He did refer back, however, to the Government's own indication in its recent White Paper 'A safe bet for success', that at the end of the consultation process it was minded to see a situation in which 'competitions were defined more precisely and operated within tighter regulatory limits'.
Chris mentioned that the principles which guided their whole approach in this area were the importance of keeping out crime, fairness and transparency and protecting the vulnerable. He listed the multiple regulators that operated to a greater or lesser degree in this area including Icstis, Oftel, the Information Commissioner, the OFT, the ASA, Trading Standards as well as the proposed new regulatory body the Gambling Commission. He emphasised that one of the objects of this consultation process was to gauge opinion as to whether this regulatory situation might be simplified.
Chris also suggested there was a strong feeling that any confusion between lotteries and prize competitions should be removed and although he did not say so in so many words, a bystander might have got the impression that free-standing non promotional commercial lotteries such as the scratchcard/premium rate telephone line events focused on by Caroline Griffiths were dangerously close to the chopping block.
On timing, Chris did not rule out the introduction of any new prize promotion regime in 2003/04. When pressed, however, on the dangers of introducing changes under this process, and then having to introduce further changes shortly afterwards as a result of the potential EU Sales Promotion Regulation, he said he could envisage a situation where all the changes were brought into force at one go, which could see a slight delay beyond the '2003/04' timeframe.
In his hard hitting, final presentation Jerry Stone, President of the UK arm of Mosaic Group Inc, the worlds largest independent marketing and sales solutions company, cautioned the regulators against 'tighter' regulation in an area where the vast majority of consumers were already simply ignoring any detailed rules under which prize promotions were operated.
The Government needed to support making promotions more successful for the brands that were able to run them so that they continued to efficiently achieve what they were always intended to do, namely stimulate spending and competition in the market place. Clearly 'less was more' in this area, Jerry suggested and although its natural inclination might be to introduce yet more regulation, the Government should think hard before doing so: there was still enormous power in existing non-regulatory pressures which saw to it that most promoters operated prize promotions fairly and reasonably. Peer pressure, word of mouth and the overriding importance of keeping the brand free from taint in the whole process were examples.
During the concluding panel session, some of the concerns raised by the questioners included a continuing fear that the two consultation processes currently underway would lead to two sets of new regulations in this area, following quickly on each other, anxiety at how long this whole process appeared likely to take and strong views on the part of some that a minimalist approach should be adopted so far as regulations were concerned, with clarity, simplicity and fairness to all sides the ideal goals.
Why this matters:
This forum was probably the only 'live' event in which the DCMS and the prize promotion industry had the chance to meet face to face to exchange views in a public forum. The feedback suggests that those who attended found the process worthwhile and it is to be hoped that the consultations currently being conducted by the DCMS and the DTI will be enriched as a result. The DCMS's consultation period ends on 31 August 2002, whilst the DTI's goes on until 25 October 2002, but all indications are that no law changes will be with us until 2003/04 at the earliest and possibly even later. For the moment, therefore, the industry must continue to struggle on with the existing regulatory regime, warts and all.