Understanding the New ARCON Regulation for Betting and Lotto Companies in Nigeria3 min read

In recent years, the Nigerian betting and lottery industry has expanded significantly, attracting millions of players and investors. This rapid growth has also brought increased regulatory scrutiny, with the Advertising Regulatory Council of Nigeria (ARCON) introducing new guidelines aimed at ensuring ethical advertising practices. The latest ARCON regulation directly impacts how betting and lotto companies run their promotional campaigns across different media platforms.

This article explores the key elements of the new ARCON regulation, compliance requirements, potential risks of non-compliance, and strategies for operators to stay within the regulatory framework.

Key Aspects of the New ARCON Regulation

The new ARCON regulation mandates that all promotional materials, including graphics, audiovisuals, banners, and animations used in advertising campaigns by betting and lotto companies, must undergo vetting and approval by ARCON before being used. This rule applies to both online and offline advertising channels.

Approval Process and Costs

1. Adcopy Vetting Rates:

1. • ARCON charges N1 million for vetting and approving five (5) versions of an adcopy.
   • If the same adcopy is intended for use across multiple platforms, such as Google pay-per-click (PPC) ads, TV commercials, and outdoor advertisements, a separate fee of N1 million per platform is required.

For instance, if a company gets five versions of an ad approved for Google PPC and later decides to use the same versions on TV, they will need to pay an additional N1 million for the TV ads.

2. Expiry of Approved Copies:

1. • Approved adcopies have a validity period:
     • Three (3) months for online campaigns.
     • One (1) year for mainstream or traditional media campaigns. After the expiry period, companies must reapply and pay for a fresh vetting process.

3. Scope of Approval:

1. • The regulation covers all promotional materials intended for external campaigns, including:
     • Social media posts.
     • Google and Meta (Facebook/Instagram) ads.
     • TV commercials.
     • Outdoor billboards.
   • Even simple images posted for social media engagement require ARCON approval.

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Criteria for Approval

ARCON has set specific criteria that betting and lotto companies must meet before their promotional materials can be approved:

1. Local Content Requirement:

1. • Ads featuring human faces must use Nigerian models or ambassadors.
   • If the ad features a known personality (e.g., an influencer or brand ambassador), the company must provide the person’s National Identification Number (NIN) during the vetting process to confirm consent.
   • The use of foreign models is only allowed for brands sponsoring international teams without Nigerian representation.

2. Prohibition of AI-Generated Human Images:

1. • ARCON explicitly prohibits the use of AI-generated images of humans in advertisements, as these do not meet the local content requirement.
   • While AI-generated avatars or cartoons can be used for casino and game promotions, they cannot be used for sports betting ads featuring human activities.

3. Ethical Advertising Standards:

1. • All promotional materials must adhere to ARCON’s ethical advertising standards, which promote responsible gaming and prohibit misleading content.

Compliance Strategies for Betting and Lotto Companies

1. Early Engagement with ARCON: Betting and lotto companies should engage ARCON early in their campaign planning process to ensure timely approval of promotional materials. This minimizes delays and allows for smoother campaign execution.
2. Use of Brand Ambassadors: Since the regulation requires NIN verification for models and influencers, companies may consider partnering with official brand ambassadors who can consistently feature in their ads. This approach simplifies the approval process and ensures compliance with the local content guideline.
3. Avoidance of Human Images in Certain Campaigns: For casino and game promotions, companies can use avatars, cartoons, and non-human graphics, which are allowed under the regulation. This strategy reduces the need for NIN verification and simplifies the approval process.
4. Budgeting for Multiple Platforms: Companies should budget for multiple vetting fees if they plan to use the same adcopy across various platforms (e.g., online, TV, and outdoor). Proper budgeting ensures seamless multi-platform advertising without interruptions.

Potential Risks of Non-Compliance

Non-compliance with the new ARCON regulation carries significant risks, including:

1. Fines and Penalties: ARCON actively monitors online and offline campaigns, and any company found using unapproved adcopies may face fines starting from N500,000 per violation.
2. Reputational Damage: Being flagged by ARCON for non-compliance can harm a brand’s reputation, reducing trust among customers and stakeholders.
3. Campaign Disruption: Without ARCON approval, companies risk having their campaigns suspended or banned, leading to financial losses and missed marketing opportunities.

Frequently Asked Questions (FAQs)

1. Do we need an ARCON certificate at this stage? What is needed is the vetting and approval of designs intended for advertising. Upon approval, ARCON will issue a certificate/document as proof of compliance.
2. Does ARCON need to vet images and designs used within a betting site? Any promotional materials used for external campaigns, including those displayed on betting sites, must be vetted by ARCON if they feature human faces.
3. Can avatars and cartoons be used for casino and game adverts? Avatars, cartoons, and other non-human graphics can be used for casino and game promotions without violating ARCON’s guidelines.
4. Is there an expiry time for approved concepts? Approved concepts expire after three (3) months for online ads and one (1) year for traditional media ads.
5. What happens if we don’t comply with ARCON regulations? Companies that fail to comply risk being fined at least N500,000 per violation. Additionally, their campaigns may be suspended, leading to reputational and financial losses.

The new ARCON regulation aims to promote responsible and ethical advertising in Nigeria’s fast-growing betting and lotto industry. While the guidelines may seem stringent, they offer an opportunity for operators to enhance transparency, build trust, and ensure sustainable growth.

Betting and lotto companies must adopt proactive compliance strategies, including early engagement with ARCON, proper budgeting, and adherence to local content requirements. By doing so, they can avoid hefty fines, protect their reputation, and deliver impactful marketing campaigns that resonate with their target audience.