A banner ad on www.sportsbeta.ladbrokes.com, for a sales promotion, stated "UP TO £500! IN FREE BETS ON LADBROKES EXCHANGE". Smaller, hyperlinked text stated "* T&Cs Apply - Click here". Clicking on the link brought up a window in which text stated "£500 Free Bets - Terms and Conditions: - Offer applies to all Ladbrokes Exchange customers. - On paying £25 (or currency equivalent) in exchange commission the member will be given a £25 free bet. - For each additional £100 in exchange commission paid, the customer will be given an additional free bet of £25 until a cumulative total of £500 in free bets has been awarded. - Accounts which have met qualifying conditions will have free bets credited within 72 hours. - Free bets balances cannot be withdrawn until they have been bet with at odds of 1.5 or greater. - Free Bet stake is not returned on winning free bets. Free Bets can be used on the Ladbrokes Exchange including the mobile exchange app. - Free Bets cannot be used on Exchange Multiples or other Ladbrokes products. - Free Bets must be used within 90 days of being awarded".
The complainant, who understood that in order to obtain £500 in free bets, customers must have won a minimum of £38,500, challenged whether the ad was misleading and participants were being treated fairly and honourably.
Ladbrokes Betting & Gaming Ltd confirmed that the complainant was correct in their understanding that, in order to obtain £500 of free bets, customers must have paid £1,925 in commission to Ladbrokes on their winning bets, which, at a commission rate of 5%, meant they would have had to have won £38,500.
Ladbrokes highlighted that the ad stated that "UP TO" £500 of free bets were on offer, and that it made clear that terms and conditions applied and made the significant terms and conditions available one click away from the ad, in a pop-up box. They said the terms and conditions in the pop-up box explained that an initial payment of £25 in Exchange commission was required to be made to qualify for the first free bet of £25, and that for each further £100 of commission paid, customers qualified for a further £25 free bet, until such time that a total of £500 in free bets had been awarded. That allowed customers to determine how much commission was required to be paid to obtain any amount of free bets, in multiples of £25 up to a maximum of £500, and the fact that they would need to pay £1,925 in commission (at the rate of 5%) to qualify for the maximum of £500 in free bets.
Ladbrokes said the promotion was specifically designed to promote and reward customer loyalty, rather than being a short-term bonus. There were no time restrictions and so customers included in the offer (the offer was no longer available to new customers) would continue to earn free bets, up to the maximum £500, for the lifetime of their account. They said that 890 customers had so far received free bets; 5.6% of those 890 customers had received the maximum £500 in free bets, a further 4.6% had so far received at least £250 of free bets, and a further 14.6% had so far received between £100 and £225 in free bets. Ladbrokes asserted that a high proportion of the included customers would eventually achieve the full £500 in free bets at some stage given that the promotion would remain in place for the lifetime of their accounts.
The ASA understood that the Ladbrokes Exchange charged commission of between 5% and 2% on net winnings (the more a customer bet, the lower the rate of commission they would be charged). We therefore understood that in order to qualify for their first £25 of free bets, a customer who was charged commission at 5% must accumulate £500 of winnings. Thereafter, they must accumulate a further £2,000 of winnings in order to qualify for each additional £25 of free bets. In order to receive the maximum of £500 free bets, they must win a minimum of £38,500 on the Exchange. Customers whose betting patterns meant they were charged lower rates of commission must accumulate larger amounts of winnings to qualify for each £25 of free bets; a customer who was charged commission at a rate of 2% must win a total of £96,250 in order to receive the maximum £500 of free bets. We noted that customers were therefore required to have won significant sums of money on the Exchange in order to qualify for each £25 of free bets.
We considered consumers would understand from the ad's claim "UP TO £500! IN FREE BETS ON LADBROKES EXCHANGE" that some customers might not fulfil the requirements to receive the full £500 of free bets, but also considered that the overall impression created was that a reasonable proportion of customers would fulfil the requirements to qualify for a significant percentage of the maximum £500 of free bets, within a reasonable time frame. Whilst we acknowledged that the promotion continued to apply throughout the lifetime of the included customer accounts, and that around 16% of customers included in the promotion had so far received free bets, we also understood that only 0.9% of customers included in the promotion had so far qualified for the full £500 of free bets, and only 3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. had so far qualified for £100 or more of free bets. Because of the significant sums of money involved we understood it was unlikely that many customers would qualify for a reasonable percentage of the £500 of free bets for a significant time period, if at all. We therefore concluded that that significant limitation should have been made clear in the ad in order to avoid misleading consumers as to the likelihood of them being able to qualify for the full £500 of free bets.
The terms and conditions to the offer, which were clearly referenced in the ad and appeared one click away, provided information as to the amount of commission (£25 in the first instance, and £100 thereafter) that would be paid to Ladbrokes in order to qualify for each £25 of free bets. We considered, however, that because of the significant sums of money involved, the terms and conditions should have made clear the amount of winnings a customer must accumulate in order to have paid the relevant amounts of commission; we considered that information was likely to influence consumers' understanding about the offer. Because the terms and conditions did not make clear the significant extent of the monetary commitment that was entailed in qualifying for each £25 of free bets, we concluded the offer was in breach of the Code.
The ad breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
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), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation), 3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. and 3.10 3.10 Qualifications must be presented clearly.
CAP has published a Help Note on Claims that Require Qualification. (Qualifications), 3.23 3.23 Marketing communications must make clear the extent of the commitment the consumer must make to take advantage of a "free" offer. (Free), 8.2 8.2 Promoters must conduct their promotions equitably, promptly and efficiently and be seen to deal fairly and honourably with participants and potential participants. Promoters must avoid causing unnecessary disappointment. (Sales Promotions), and 8.17 8.17 All marketing communications or other material referring to promotions must communicate all applicable significant conditions or information where the omission of such conditions or information is likely to mislead. Significant conditions or information may, depending on the circumstances, include: and 8.17.1 8.17.1 How to participate
How to participate, including significant conditions and costs, and other major factors reasonably likely to influence consumers' decision or understanding about the promotion (Significant Conditions for Promotions).
The ad must not appear again in its current form. We told Ladbrokes Betting and Gaming Ltd to ensure their advertising for the offer did not imply that a reasonable proportion of customers would fulfil the requirements to qualify for a significant percentage of the maximum £500 of free bets. We also told them to ensure the terms and conditions made clear the extent of the monetary commitment that was entailed in qualifying for each £25 of free bets.