Ad description
A website for EU Lotto Ltd, www.lottoland.co.uk, seen on 27 July 2017, stated "PowerBall £169 million". Tick boxes allowed consumers to choose to enter the next Thursday or Sunday draw or both, for one, two, four or eight weeks.
Issue
The complainant, who believed the jackpot total was subject to change depending on whether it was paid out in a single lump sum or in instalments, challenged whether the ad was misleading.
Response
EU Lotto Ltd said their website, FAQs and terms and conditions referred to the options to take a lump sum or a 30-year annuity. They were satisfied that an explanation of the jackpot amount, how it was paid out and the difference between the lump sum and 30-year instalment options was explained between the terms and conditions, Help and FAQs page, footers on the home page, information on the product pages and the comparator table of Powerball and Mega Millions. They said they were nevertheless willing to make changes to add further clarity.
Assessment
Upheld
The ASA considered consumers were likely to understand that the value quoted in the ad – "PowerBall £169 million" – was the prize EU Lotto Ltd would pay out if a participant chose the correct winning numbers in the next PowerBall draw. We considered consumers' normal expectations would be that the whole amount would be paid out in a single sum immediately after the draw. We noted that a Help and FAQ link at the bottom of the home page took consumers to a list of questions, one of which was "How does jackpot prizing, tax and payouts for PowerBall ... work?" which in turn linked to text which stated "Lottoland replicate the pay-out structure of the Official Lottery Draws in America ... the total prize is reduced by 38% to make allowances for the tax Official winners in Tiers 1 to 3 would have to pay. For Tier 1, subject to Lottoland's discretion, players can choose if they would like to be paid out either by lump sum or via in [sic] 30 year instalments in an annuity package. The lump sum method will be paid out at 60% of the total value of the annuity amount. The annuity method will be paid as one annual payment being made for the 30 year term. The level of payments is calculated such that the payments rise 4% from year to year until the full sum has been paid out. Additionally, betting with us, you win the amount that you would have won if the official prize fund was shared between you and any official lottery winners".
From that explanation, we understood that the "PowerBall £169 million" figure would always be reduced by 38% to allow for the tax that winners in the official lottery would have to pay. Participants opting for the single lump sum rather than the 30-year term would then receive 60% of the remaining balance. Furthermore, the pre-tax value quoted in the ad would be split as if it had been shared in the way the official prize would be shared if there had been more than one jackpot winner.
We considered it was not sufficient to state separately from the ad, via Help and FAQ links, material information that the jackpot value would always be reduced to take account of the tax that would be paid on the official lottery prize; that participants opting for the single lump sum rather than the 30-year term would receive a reduced amount – 60%, of the remaining balance after tax – and that, if the official PowerBall prize was split between more than one winner, the value quoted in the ad would be split in a similar way. We considered that this information needed to be stated prominently in the main ad using wording that consumers would be able to absorb easily. We welcomed EU Lotto Ltd's stated willingness to make changes. However, because the ad had quoted a prize value that would never be paid because it would always be subject to non-optional deductions and had omitted material information about how EU Lotto Ltd's pay-out system worked, we concluded that the ad was misleading.
The ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
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 the form complained of. We told EU Lotto Ltd to ensure that in future the value of any prizes or winnings quoted included any non-optional deductions and stated clearly and prominently any material information that would affect a consumer's decision to participate, such as how EU Lotto Ltd's pay-out system worked.
