Background

Ad description

A website for LottoGo.com (www.lottogo.com), seen on 13 July 2018, allowed users to bet on the outcomes of foreign lotteries. The home page listed the various lotteries on which users could bet, along with their current prize funds.

Large text at the top of a page advertising entry to the Mega Millions lottery in the USA stated “MEGA MILLIONS £256 MILLION”. Text further down the page, under the heading “How to win the Mega Millions Jackpot” stated “Mega Millions has an opening jackpot of $15 million with no cap. It makes the world's biggest lottery winners!”.

Issue

1. The complainant, who understood that the prize amounts stated were subject to United States taxes and other deductions, challenged whether the ad was misleading.

2. The ASA challenged whether the ad was misleading because it did not make clear that it was offering the opportunity to bet on the outcome of the lottery, rather than participate in it.

Response

Annexio Ltd t/a LottoGo.com said they had made a number of changes to their website on advice from the Gambling Commission in 2016. They believed that the language used on their website and in their advertising followed the Gambling Commission’s guidelines on the advertising of betting on lotteries.

1. LottoGo.com said they did not believe it was misleading to advertise potential prize amounts pre-tax and it was industry practice to do so. They said it was not possible for them to know the tax status of their players, who were resident in a range of jurisdictions and that it was obviously the case that some jurisdictions would deduct tax from winnings at source. They said the ad made clear that tax and other deductions may be made from the winnings. That information could be easily found under “Tax Requirements” on each lottery page and again further down under the heading “Jackpot Structure”, where prize amounts were qualified with the text “after local taxes”.

LottoGo.com said those deductions were also made clear in their terms and conditions, which included the statement “Winnings are calculated by reference to the payout rules of the relevant lottery provider. In some cases (for example the Powerball lottery), lottery providers apply a mandatory deduction where jackpot winners claim a cash lump sum. For these lotteries we make this deduction. In addition, some lottery providers deduct local withholding or similar taxes from the cash lump sum payable. We will also deduct such sums as would be due for withholding or similar tax purposes from any Winnings due to you. You should be aware that in some cases this can reduce the net Winnings amount due by nearly half of the advertised jackpot amount”; the second sentence of which was in bold. They believed the inclusion of this information in the terms and conditions was sufficient and that it did not therefore have to be replicated elsewhere. They argued that adding qualification which explained that winnings might be reduced by a substantial amount risked giving the impression that players would always win the headline amount, when in fact, as with all lottery prizes, the jackpot would be shared if there was more than one winner.

2. LottoGo.com said the website made clear to consumers that they were betting on the outcome of lotteries rather than entering them. That was made clear by text at the bottom of the home page which stated “Annexio Limited does not operate a lottery. Members place bets on the outcome of national lotteries, except on EuroMillions, for which official tickets are purchased. Official lottery tickets and insurance are purchased based on the bets placed so that all winnings are equal to the cash option of national lottery winnings”.

They argued that was made clear by their use of the term “bet”, including on the website home page where consumers were invited to “Bet on the World’s Biggest Jackpots” and on the Mega Millions page where it stated “HOW TO BET ON MEGA MILLIONS” and the subsequent sentence “Bet on Mega Millions by selecting five main numbers …”. A separate section on the Mega Millions page was headed “HOW TO BET”, they said that as the section was otherwise sparse of text, it was clear that consumers were betting on the result of a lottery. They said that the language used in the section where players were invited to “pick” their numbers was not inconsistent with betting. They argued that bettors would be invited to “pick” the winner of a horserace, for example, and as such the word “pick” was neutral in gambling terms and did not connote participation in a lottery. They pointed to guidance published by the Gambling Commission on betting on lotteries and believed their ad was clear and did not mislead consumers.

Assessment

1. Upheld

The ASA noted that the website home page listed the various lotteries on which users could bet, along with their current prize funds. In the case of Mega Millions it stated “£256 Million” without any further qualification. That claim was repeated in large text at the top of the Mega Millions lottery page. We therefore considered that consumers were likely to interpret those claims to mean that they could win that amount of money or a share of it, if there was more than one winner.

We noted that the terms and conditions explained that winnings collected by LottoGo.com’s players were calculated according to the pay-out rules of the relevant lottery provider. That meant that the pay-out could be lower than that stated in the ad if it were taken as a lump sum and might be further reduced to copy how United States taxes might reduce pay-outs from the actual lottery. Those terms stated “You should be aware that in some cases this can reduce the net Winnings amount due by nearly half of the advertised jackpot amount”. We considered that was material information needed in order for consumers to make an informed decision about whether or not to participate and therefore needed to be included prominently where prize fund amounts were quoted.

While we noted that the Mega Millions lottery page included a section titled “Tax Requirements” which stated that advertised winnings would be subject to deductions and taxes, it did not give any indication of how, in practice, those deductions might affect the headline amount. Also, we did not consider that the text was, in any case, sufficiently prominent to counter the overriding impression given by the headline claims.

Because the ad did not make clear that the jackpot amounts might be subject to significant deductions which might reduce them by nearly half, we concluded it was misleading.

On that point the ad breached the CAP code (Edition 12) rules  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.  (Misleading Advertising) and  3.3 3.3 Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the  medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.  (Misleading Advertising)

2. Upheld

The ASA noted that the website home page showed the company’s corporate logo, “lottogo.com” in the top left. Below that, the page was dedicated to promoting various lotteries from around the world accompanied by lottery-style branding for each of those lotteries, under text which stated “Bet on the World’s Biggest Jackpots”. The Mega Millions page displayed the jackpot amount at the top and then showed a large ticket-style grid for choosing numbers, including text which stated “Pick 5 numbers…”.

In the absence of a clear indication to the contrary, we considered that the overall impression given by those elements was that consumers were being offered the opportunity to play the Mega Millions lottery, among others. However, we understood that the site was in fact offering consumers the opportunity to bet on the outcome of the lottery via a gambling operator, rather than play it.

We noted that text on the home page invited consumers to “Bet on the World’s Biggest Jackpots”, but we did not consider that the term “bet” on its own was sufficient to indicate to consumers that they were not playing the lottery itself. We noted that there was a statement at the bottom of the page which explained more clearly that members “place bets on the outcome of national lotteries”. However, we considered that this text was likely to be overlooked by consumers as it was small and at the very bottom of the page.

We noted that there was additional explanatory text further down the Mega Millions page and while that text included the term “bet” on a number of occasions, it also used terms such as “HOW TO WIN THE MEGA MILLIONS LOTTERY JACKPOT”, “jackpot”, “draw” and “player” which we considered were likely to be associated with playing lotteries directly and which therefore did not indicate that consumers were being invited to bet. Text underneath the heading “Previous Winners” described the experiences of previous winners of the Mega Millions lottery itself in the United States. In the “HOW TO BET” section, beneath the heading “NUMBER SELECTION”, text stated “If you match all 5 main numbers and the Mega Ball you’ll be a jackpot winner!” and text under the heading “DRAW DATES” stated “Join those from across the world who are eagerly awaiting the results to find out if they are the next winner”. We considered that all of those elements contributed to the impression that consumers were being offered the opportunity to play the lottery, rather than bet on its outcome.

We noted that LottoGo.com had referred us to guidance published by the Gambling Commission on betting on lotteries. However, we noted that guidance cautioned against the use of lottery-themed terms such as ‘draw’, ‘play now’ and ‘jackpot’ alongside lottery ticket style betting slips as that could result in consumers believing these products involved participation in a lottery rather than a betting or gaming product.

Because consumers were unlikely to understand from the ad as a whole that they were being offered the opportunity to bet on the outcome of a lottery via a gambling operator, rather than participate in the lottery itself, we concluded that the ad was misleading.

On that point the ad breached the CAP code (Edition 12) rules  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.  (Misleading Advertising) and  3.3 3.3 Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the  medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.  (Misleading Advertising)

Action

The ad must not appear again in its current form. We told LottoGo.com to make clear, as soon as prize funds were quoted, the extent to which winnings may be subjected to deductions. Furthermore, they must make clear that consumers were not being offered the opportunity to participate in a lottery, but to bet on its outcome.

CAP Code (Edition 12)

3.1     3.3    

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