Legal View: Affiliate marketing and free-to-play games

Last month, the Gambling Commission warned operators to take immediate action to ensure that their affiliates were not promoting free-to-play versions of their gambling games to individuals who have not been age verified.

On 7 May 2019, the Commission’s revised licence conditions and codes of practice (“LCCP”) came into force. Revised social responsibility condition 3.2.11 now requires remote operators to verify the age of all customers before they can deposit funds, play free-to-play versions of gambling games or gamble using their own money, a free bet, or a bonus. This condition replaced the old LCCP condition, which required operators to verify the age of a customer within 72 hours of registration, which in theory allowed persons aged under 18 to gamble during this window.

Since the new LCCP came into force, it’s clear that most operators have adopted automated systems allowing them to smoothly verify a new customer’s age to comply with the new age verification requirement. However, the Commission is concerned that affiliates are continuing to promote free-to-play versions of operators’ games for customers to try out, to persuade them to sign up. It is this area of activity which is causing the Commission concern.

The Commission has reminded operators that under social responsibility code 11.2, they are responsible for the actions of their affiliates and that they must ensure that affiliate marketing activities are carried out in compliance with the LCCP. The Commission notes that this will require advertising methods to be revised, by removing the ability for potential customers to play free-to-play versions of games. The guidance note makes it clear that other forms of affiliate advertising, such as using screenshots or videos of games being played would not be a breach of the LCCP. However, where there is customer interaction with free-to-play versions of gambling games, this is prohibited. The Commission also makes it clear that the restrictions do not apply to B2B suppliers offering demo games to commercial customers, rather than to consumers.

So what practical steps should operators now be taking?

• Writing to all affiliates notifying them that free-to-play versions of all games have been withdrawn and must not be used to market to customers in Great Britain
• Withdraw access to any free-to-play version of gambling games from affiliates (where these are to be used to market to GB customers)
• Insert an addendum into each affiliate marketing agreement to make this clear; and
• Audit affiliate websites to ensure that they are compliant (dip samples could be used where numbers are large)

The Commission has warned operators to take immediate steps to ensure that under 18s cannot play free-to-play versions of their games via affiliates websites. It’s clear that if this continues, the Commission will act against operators, who will not be able to simply pass the buck to their affiliates.

It’s clear that affiliate marketing is going to be hit by these restrictions. Offering free-to-play versions of games was historically a good way of attracting new customers. Whilst watching videos of gameplay might still be attractive, the inability to offer the real thing is likely to reduce operator sign-ups and hence affiliates’ revenues.