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The Advertising Standards Authority (ASA) has banned a particular advertising on lottoland.co.uk website after it figured out that consumers could never win the £169 million prize because of tax deductions.
The lottoland.co.uk published an ad on July 27 last year: “PowerBall £169 million,” with tick boxes allowing consumers to pick when to enter and for how many weeks.
A complainant, who was of the impression that 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.
EU Lotto said their website, FAQs and terms and conditions referred to the options to take a lump sum or a 30-year annuity and 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 were explained clearly.
But the Advertising Standards Authority (ASA) said consumers were likely to understand that the whole £169 million would be paid out in a single sum immediately after the draw if they chose the correct winning numbers.
It noted that a 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 that Lottoland replicated the pay-out structure of official lottery draws in America which reduced the total prize by 38 per cent to make allowances for tax.
The notes went on to say that, subject to Lottoland’s discretion, players could choose if they wanted to be paid out by lump sum or in 30 year instalments in an annuity package, with a lump sum paid out at 60 per cent of the total value of the annuity amount.
The ASA said that it understood from the explanation that the PowerBall £169 million figure would always be reduced by 38 per cent 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 per cent of the remaining balance.
The ASA said: “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.”
Lottoland chief executive Nigel Birrell said: “Lottoland accepts the ASA’s 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.”
Source: European Gaming Industry News