Lottoland has once again fallen afoul of the Advertising Standards Agency, this time for the inaccuracy of a recent advertising campaign.
The company’s ad for the Powerball said that the payout would total £169m ($223m) but, because of hidden mandatory fees, the actual take-home money would have been considerably lower.
Lottoland has pledged to improve.
Lottoland offered ‘misleading’ jackpot
The complaint was based on the fact that the jackpot total would vary, depending on whether it was paid out as a lump sum or in installments, condemning it as “misleading” and the ASA quickly agreed.
The ruling stated: “The ad must not appear again in the form complained of.”
Lottoland has since swung into action, as CEO Nigel Birrell quickly responded to the ruling by addressing the recent improvements they had put into place. He said: “Lottoland accepts the Advertising Standards Agency’s (ASA), findings and has already added more information to the website to further clarify the deductions on the Powerball jackpot. Lottoland volunteered to make changes to the website as soon as this issue was raised, as we are committed to being fully open and transparent with our customers.”
Lottoland’s parent company, EU Lotto said it was satisfied with how the payment options were described, saying that the possibility of a lump sum payment or a 30-year annuity was disclosed on the game’s website.
However, the ASA disagrees with this and said consumers would most likely believe that the whole sum of £169million would be paid out upon winning.
Actual figures much lower
The game, which requires players to select numbers and tick whether they want to play up to three times per week before specifying the number of weeks, was advertised on the website itself and on other platforms. The ASA investigation discovered that the winning amount would always be reduced by 38% to account for the tax that winners of the official lottery would have to pay.
After this deduction, winners who chose to receive one lump sum payment would only have won 60% of the remaining balance. The ASA stated that any future adverts for games such as this would need to make the payout options clear and available to consumers to allow them to make an informed decision before paying to participate.
Not the first issue
This is not the first time Lottoland has been found to fall short of ASA regulations. In 2017, the company was fined following a complaint about an advert that did not make it clear that players were betting on an outcome of a lottery, as opposed to entering the competition itself. After that instance, the company’s director said: “The fine I feel was pretty unfair, to be honest with you. Look at the number of companies that have had adverse ASA rulings, and then nothing’s happened.” At the time, it was their first and only adverse ASA ruling, and the company offered a voluntary settlement of $150,000, although the company’s director also said that he did not think this was reasonable as other companies in those circumstances had not been asked to pay out.
Committed to transparency
The company’s director has been clear on their policy of maintaining transparency, saying that Lottoland voluntarily amended its advertising strategy in light of the complaint. Consumers argue that terms for games such as these are unclear and could be made more user-friendly.
The ASA’s decision states that players need to be able to understand the potential winnings before deciding on whether to play and therefore clarity of these terms is of great importance. Because this was the second time the company has been in hot water over unclear advertisements, it was deemed that the access to information and fees needed to be made more prominent to players.
In its ruling, the ASA said: “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 were split between more than one winner, the value quoted in the ad would be split in a similar way.” So, while the information was available to consumers at the time, it was not made clear to them ahead of deciding to purchase this case.
Lottoland is now committed to ensuring that its playing terms are completely transparent going forward.