After looking like sidelining proposals for prize promotion law reforms, the Department of Culture, Media and Sport publishes a consultation paper. But do they really want reform?
Topic: Games of Chance and Skill
Who: The Department of Culture, Media and Sport
When: May 2002
As previously reported on marketinglaw.co.uk, in July 2001 the UK government published the findings of the Gambling Review. This was chaired by Sir Alan Budd and set up in December 1999 to advise on the entire range of legislation governing gambling in Great Britain, apart from that governing the National Lottery. Amongst the areas reviewed was the Lotteries and Amusements Act 1976, which lays down the rules governing the running of prize promotions in the UK. The Budd proposals in this area were radical. Amongst the recommendations was the scrapping of the rule criminalizing prize events in which participants have to pay to enter and the winner is decided by pure luck. It was also suggested that combining some skill and some luck in a prize promotion mechanic should be expressly permitted. In the light of these suggestions, there were high hopes for the HM Government's ensuing White Paper "A safe bet for success", published in March 2002. However, these hopes were dashed, since the paper pulled back from specific proposals, commenting that since there was no clear consensus on the way forward, further consideration and consultation was needed. Although marketinglaw commented at the time that further long delays appeared likely, the Department for Culture, Media and Sport has given the lie to this by embarking on a prize promotion law consultation process by way of a letter dated 23 May 2002. This seeks comments by 31 August 2002, with a view to the formulation of the government's policy in this area by the end of October 2002 and the introduction of any new rules by the end of 2003.
So far so good, but the 23 May suggests the DCMS is yet to be convinced there is a desperate need for major legal changes.
It points out that in the premium rate telephone line sector, the Independent Committee for the Supervision of Standards of Telephone Information Services ("ICSTIS") already operates a detailed code. It also points out that contrary to the view of many pundits, it is already possible to operate a prize promotion in which a mixture of skill and luck determines the winner and stay within the law. The letter cites 14 of the 1976 Lotteries and Amusements Act, which does state that for a prize competition to be legal, success only has to depend to a "substantial degree" [not 100%] on the exercise of skill, thus impliedly allowing an insubstantial degree of luck.
Having said this, the letter suggests that there may be a number of considerations which "might lead to the conclusion" that there is a need for further regulation.
These include a possible need for steps to ensure that participants can easily find out what the cost of entering any particular competition is and the likelihood of winning. This echoes the recent proposed EU Promotion Regulation containing an EU-wide rule requiring the odds of winning to be indicated in prize promotion Rules.
Other areas where further regulation might be required, says the DCMS, include limits to the cost of entry or the value of prizes, new ways of ensuring that draws are conducted fairly and maybe minimum standards for clear and unambiguous competition rules. Also, there could be issues that need to be addressed around potential abuse by way of repeated multiple entries or unscrupulous operators. A related question here is who should enforce any further regulations proposed. The remit of ICSTIS only extends to premium rate phone lines and perhaps there is a case for having a single regulator to cover the operation of prize events in all media.
Prize events with a free entry route are also specifically mentioned. In the context of a mechanic which allows a free entry route in parallel with an entry method which involves a payment, the letter asks whether there is a need for clearer rules as to when the free entry route will and will not be regarded as genuine and therefore capable of saving the event from illegality as a lottery.
Why this matters:
The consultation letter is brief and to the point, but readers comparing this with the Budd report’s almost evangelistic approach might get the impression, rightly or wrongly, that so far as the DCMS is concerned we may well be in an “If it ain’t broke..” situation. If marketers are still wedded to the concept of radical, root and branch simplification of UK prize promotion laws, therefore and want this process to end up in more than minor adjustments to the regulatory landscape, they will have to stand up and be counted by the end of August 2002.