Some personal finance experts have claimed that the new advertising rules in the UK, as part of which the use of professional athletes and celebrities to promote gambling operators’ services has been banned, should be extended outside the lottery and gambling sector.
As Casino Guardian reported at the time, at the beginning of April, the Committee of Advertising Practice (CAP) unveiled a decision, under which football stars, celebrities and social media influences will no longer be able to promote gambling companies’ services in the UK. The change is set to come into effect in October 2022. Following the announcement, Claro Money, a financial coaching app, issued an opinion that the recently-unveiled regulations should also apply to other sectors, such as cryptocurrency and day trading applications.
Claro Money’s chief marketing officer, Alex Ford, welcomed the decision of the CAP’s decision to suspend the use of popular people in gambling adverts but said that, in his opinion, the restrictions simply do not go far enough. He further explained that cryptocurrency and day trading apps are highly volatile, which makes them as risky as gambling for a large number of users.
Participation of Celebrities and Social Media Influencers in Cryptocurrency Ads Could Be As Dangerous As Promoting Gambling
Mr Ford noted that the financial coaching application is not aimed at discouraging adults from participating in activities involving day trading and cryptocurrency. However, he explained that it is important that local customers are not encouraged to take part in high-risk financial decisions without being able to make informed decisions thanks to accessing more information.
The CMO of Claro Money revealed that the financial coaching app’s suggestion has been triggered by the constantly increasing popularity of so-called “finfluencers” – or, in other words, some social media influencers who have been making content on financial topics although they are not actually qualified to give such advice.
According to reports, TikTok videos on financial topics under the #fintok hashtag have already gathered almost 928 million views.
As explained by Mr Ford, the rapidly increasing popularity of high-risk and gambling-like activities involving cryptocurrencies, financial services and day trading apps could put vulnerable people at risk, especially if the promotions of these services involve celebrities or sports stars. That is why analysts from Claro money have suggested that the newest regulations unveiled by the CAP needed to go further in order to prevent people from being influenced to make poor financial decisions.
According to Mr Ford, eliminating the links between cryptocurrency and day trading applications and sports stars and celebrities would have a positive impact on Brits, as it would reduce the number of people making investment decisions that could result in serious financial risk.
CAP Banned UK Gambling Companies from Using Celebrities and Sports Stars in Their Advertising Campaigns
As Casino Guardian previously revealed, the Committee of Advertising Practice at the Advertising Standards Authority (ASA) unveiled some new rules under which gambling operators in the UK would be suspended from using professional athletes, celebrities and social media influencers to promote their lottery and gambling products.
Furthermore, the new rules clearly state that gambling and lottery companies must make sure their commercials are not of strong appeal to children and young people. Considering the fact that children are more susceptible to making an association between social media influencers, celebrities and sports stars and the gambling products they promote, banning such personalities from appearing in these adverts is expected to have a positive effect on children and young persons.
In the last few years, the UK Government and regulatory bodies have been trying to tackle the harm that could be inflicted on customers on social media platforms.
In 2021, Charles Randell, the chair of the Financial Conduct Authority (FCA), highlighted a paid post regarding a cryptocurrency product published by Kim Kardashian on Instagram. At the time, Mr Randell warned that such adverts could put potential consumers at serious risk of losing a lot of money. He noted that Kim Kardashian disclosed the post was a paid ad but she had not been required to reveal that Ethereum Max was a speculative digital token that was created only a few weeks before that by unknown developers. And there are currently hundreds of such tokens available at crypto exchanges.
Considering the constantly rising popularity of cryptocurrencies and other digital financial services and the risks they pose to British users, the calls for further restrictions to be imposed on their advertising seem justified. However, for the time being, it remains unknown whether the Government or local regulatory bodies will take some action to prevent the participation of professional athletes, social media influencers and celebrities in such promotions to protect local customers from unwanted financial losses.
- Author
Daniel Williams
