ASA Adjudication on Racing 4 Profit Ltd

Ad

A national press ad, for a betting tipster, stated "£22,122 PROFIT 45% PROFIT ON INVESTMENT AND AN AVERAGE PROFIT PER WEEK OF £512 Henry Rix's members who bet at just £100 per point won over £22,000 in between March and the end of December 2007 - that's an average profit of £512 per week over that 10 month period. Henry's aim is now to make sure you are involved in some of racing's biggest and most inspired gambles in 2008 and, of course, make big profits along the way … Also, Free of charge to all members, Henry has the LATE LINE. Bets on the Late Line will concern particularly sensitive information that is given out around 10 minutes before the off of a race when the course market is formed. Bets are text [sic] to your mobile or e-mailed to your inbox … Henry Rix Racing, Racing 4 Profit Ltd".

Issue

The complainant challenged whether the:

1. profit claims could be substantiated;

2. period chosen to illustrate the success of the advertised service was representative; and

3. the name "Racing 4 Profit Ltd" and the ad in general, implied that subscribers were certain to make a profit using the service.

4. The ASA challenged whether the ad adequately stated the total outlay required to produce the profit claims.

CAP Code (Edition 11)

Response

1. Racing 4 Profit Ltd t/a Henry Rix Racing (Henry Rix) said the profit figures in the ad were based on the bets tipped to members over the stated period. They maintained that all the selections were proofed in advance of the races taking place to the Racing Post by e-mail. Henry Rix sent a copy of their selections and the results over the period of the claims. The master proofing spreadsheet contained details of the selected horse, race time and meeting and recommended stake. It also contained the advised price of the selection and details of which bookmakers offered that price. Henry Rix said they also took a screenshot from the relevant bookmaker's website and sent it as an attachment to the Racing Post e-mails to prove the availability of their recommended odds. They added, however, that due to time constraints they were unable to forward the same type of web screenshot for their Late Line service selections; although they said that in future they would only claim profits to the starting price thereby negating the need for a web screenshot.

2. Henry Rix maintained that the period chosen to show the success of their service could not have been more relevant to anyone joining at the time the ad appeared, as it would show the potential profits that could be made over the same membership period in the current year [the ad appeared on 21 April 2008]. They pointed out that horse racing was generally a very consistent sport in that the same tracks hosted the same meetings and races year after year, well known examples being Cheltenham, Royal Ascot, the Epsom Derby and the Grand National at Aintree. Henry Rix believed readers who wanted to join a tipping service, for instance, in May would want to know that the service had shown a profit in May each year, rather than know how the service had performed in the month before they subscribed to the service. They also pointed out that they used annual profits as a standard measure of success of the service year on year and the profit figures related to almost the whole of 2007, i.e. 10 months out of 12. Henry Rix added that the longest subscription period that the service offered was one year, and that the period quoted in the ad was therefore representative.

3. Henry Rix said 'Racing 4 Profit Ltd' was the name of the company that managed the Henry Rix Racing Services. They pointed out that the company name appeared only at the foot of the ad and was there to allow readers a point of contact with their office. R4P maintained that the company name and full contact details were included to provide full transparency and access to their company. They believed the text of the ad itself did not imply a guarantee of profit but merely listed the previous year's profits and returns which had been appropriately proofed and recorded.

4. Henry Rix maintained that, although they did not state the total amount of money required to produce the stated profit, it could easily be calculated by readers. They pointed out that the ad stated "45% PROFIT ON INVESTMENT" and a total profit figure of £22,122. The profit figure could then be multiplied by 100 and divided by 45. They believed it was clear that the outlay was roughly double the return. Henry Rix said the Henry Rix Racing Service was geared towards investors and those with knowledge of betting. They maintained that that was reflected in the relatively high cost of membership and the fact that they advertised only in the sole trade newspaper. Henry Rix believed it was unlikely that anyone would purchase or read the Racing Post newspaper if they had no knowledge or interest in horse racing or betting. They believed the type of members that the service attracted would be more than capable of doubling a figure of around £22,000 to invest a total outlay of around £44,000.

Assessment

1. Upheld

The ASA understood that the profit claims were based on Henry Rix's master record of their forecasts but that each selection was lodged with the publisher, the Racing Post. We therefore requested copies of Henry Rix proofing e-mails received by the Racing Post. We also requested that Henry Rix send the corresponding sent versions of those e-mails.

We requested sample data from both parties based on dates where Henry Rix had tipped winners along with a second sample of all the e-mails sent and received for two random months, June and September 2007. We assessed the data and noted the overwhelming majority of the forecasts corresponded with Henry Rix's master proofing spreadsheet, upon which the profit claim in the ad was based. We also noted the e-mails were sent prior to the start time of the relevant events and the majority featured the requisite web screenshot to demonstrate the availability of the recommended odds. We noted, however, some of the requested e-mails related to the Henry Rix Late Line service, which was an aspect of Henry Rix's service that involved selections being sent on some days very close to the time of the relevant event. We noted the e-mails corresponding to those selections did not feature a proofing screenshot to demonstrate the availability of the recommended odds. Although we considered that the potential effect on the overall profit claim was not serious, we were concerned that some of the odds might have been better than the generally available starting price for a particular selection. Nevertheless, we welcomed Henry Rix's acknowledgement of the potential problem and their proposal to claim profits only at the starting price of each selection, thereby removing the need to include screenshots for Late Line bets.

We note the Henry Rix were an advertiser with the Racing Post. We considered that such a relationship between publisher and advertiser required an independent third party to approve and audit the proofing system for the purposes of transparency. We noted in a previous ASA investigation, from 2006, the Racing Post were unable to satisfy the requirement. We noted, however, they had since obtained the approval of an independent third party, a firm of solicitors.

We considered that the data sent by Henry Rix and the Racing Post substantiated adequately the majority of the profit claimed and verified the general accuracy of Henry Rix's master proofing spreadsheet upon which those claims were based. We acknowledged that Henry Rix had behaved responsibly in accepting the problem with proofing the Late Line selections and proposing a solution to it. However, although we did not consider that the issue was a fundamental problem, because Henry Rix were unable to adequately substantiate the availability of odds for all of their selections, we concluded that the ad breached the Code.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

2. Not upheld

We noted the claims related to the period between March and December 2007. We noted the profit claim related to the whole of the period and the data provided included all R4P's selection both winners and losers. We also noted the associated claims were derived from the total profit figure and Henry Rix had not selected any particular periods within the wider period of the profit claim. We noted Henry Rix's assertion that prospective members were likely to want to know about their service's wider record over a longer period and understood that the main horse racing events in the UK were held each year between those dates. We therefore considered that it was reasonable for Henry Rix to use that period. We concluded that the ad was unlikely to mislead.

On this point, we investigated the ad under CAP Code clause 7.1 (Truthfulness) but did not find it in breach.

3. Not upheld

We noted the ad featured several claims relating to the profit claim of £22,122 for the period March to December 2007. Although we noted such claims as, "average profit £512 per week" and, "Henry's aim now is to make sure you are involved in some of racing's biggest and most inspired gambles in 2008 and, of course, make big profits along the way", we considered that the profit related claims were clearly presented in relation to the previous year. Furthermore, we noted the ad stated that it was Henry Rix's "aim" to make profits in the current year, 2008, and considered that readers were likely to understand that that did not mean profits for 2007 would be the same as, or that there would be a profit at all, in 2008. We also noted the complainant's concern about the term 'Racing 4 Profit Ltd', which appeared at the foot of the ad. We considered, however, that readers were likely to understand that it was the name of the company trading as Henry Rix Racing and that it merely indicated that their intended aim was to bet on horse racing to make a profit.

We noted the Racing Post was a specialised trade newspaper that focused on horse racing and associated gambling. We therefore considered that readers were likely to be familiar with Betting Tipster services and were likely to understand that gambling always involved risk. We considered that the ad made clear to readers that the profits related to a specific period and that they were likely to understand that joining the service involved the uncertainties of gambling. We therefore concluded that the ad was unlikely to mislead.

On this point, we investigated the ad under CAP Code clause 7.1 (Truthfulness) but did not find it in breach.

4. Upheld

We understood that betting tipster services usually involved a series of bets at different recommended staking levels over any given period and that their success rates varied depending on how many bets and cumulative stakes were required to yield a given level of profit. We therefore considered that the total amount of money, or the outlay, required to place the stakes necessary to yield any profits claimed over the period was materially important for prospective members. We noted Henry Rix's assertion that the profit claim in conjunction with the percentage return on investment figure could be used to calculate the total figure, but considered that it was unreasonable for readers to have to make calculations to establish the required level of outlay. Because the ad did not make explicitly clear the total, cumulative outlay required to produce the profit claimed, we concluded that the ad was likely to mislead.

On this point, the ad breached CAP Code clause 7.1 (Truthfulness).

Action

The ad must not appear again in its current form.

On point 1, we welcomed Henry Rix's intention to change the way they recorded their profits for their Late Line service.

On point 4, we told Henry Rix to state the cumulative outlay figure explicitly and with appropriate prominence (e.g. in the body copy for headline claims) in future ads with profit or associated claims.

Adjudication of the ASA Council (Non-broadcast)