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The Central Consumer Protection Authority (CCPA) is working on new regulations to prevent businesses from using corporate social responsibility (CSR) activities as a way to indirectly promote restricted products like liquor and tobacco. Reports indicate that the CCPA is preparing draft guidelines that will establish clear boundaries around surrogate advertising.

The new regulations aim to curb the practice of brands exploiting CSR initiatives and sponsorships to promote goods that are otherwise prohibited from advertising, Mint reported. According to media reports, any promotional activity, including CSR campaigns, that implies a link to a restricted product will be categorized as surrogate advertising. This also extends to the use of brand names, logos, color schemes, and layouts typically associated with banned products.

Earlier Storyboard18 reported that the Department of Consumer Affairs (DoCA) has finalized the public draft for these surrogate advertising rules. The guidelines, which are expected to be released between October and December, are designed to clarify the scope and enforcement of surrogate advertising laws.

Currently, the CCPA has regulations in place to address surrogate advertising. In its December 2022 guidelines for the 'Prevention of Misleading Advertisements,' the authority prohibited any ads that suggest a link to products or services whose advertising is legally restricted. However, there is an exemption allowing brands linked to prohibited goods to promote other products, provided it does not violate the guidelines. This exemption has raised concerns about the clarity and enforcement of the rules, with the CCPA continuing to identify violations, especially among liquor brands.

To strengthen its efforts, the CCPA is also drafting new rules aimed at preventing celebrities and influencers from promoting alcohol and tobacco products through surrogate advertising. Reports suggest that under these proposed rules, celebrities and influencers could face fines up to Rs 50 lakh for violating surrogate advertising restrictions. The penalties would include a Rs 10 lakh fine for a first violation, with subsequent violations carrying fines of Rs 50 lakh.

Prior to this, ASCI last year reported 82 commercials of direct alcohol ads and 65 commercials of vaping and e-cigarettes to various authorities for further action.

CCPA moves to block surrogate advertising via CSR; targets liquor and tobacco brands

In clear violation of the Ministry of Information and Broadcasting (MIB) advisory, which enforces a blanket ban on surrogate advertising by betting and gambling platforms, the Pro Kabaddi League (PKL) has been accused of promoting illegal betting and gambling platforms. Real Money Gaming (RMG) operators have now lodged complaints with the MIB, seeking immediate intervention.

In a letter sent to the MIB last month (obtained by Storyboard18), the RMG operators claim that illegal and offshore betting and gambling platforms like Melbet, Dafabet, Vegas11, Fun88, and 1xBet are engaging in surrogate advertising using names like Melbat, Dafanews, Vegas11 Sports News, Fun88 News, 1xbat, and Batery.AI.

The RMG operators further allege that Dafa News a surrogate of Dafabet based out of Phillipines and Parimatch News, a surrogate of the betting platform Parimatch, based in the tax haven of Cyprus, are official partners of the PKL. 

<a href="https://www.storyboard18.com/how-it-works/govts-new-rules-for-surrogate-ads-to-be-released-within-next-quarter-exclusive-38913.htm">Read more: Govt's new rules for surrogate ads to be released within next quarter: Exclusive</a>

Additionally, these platforms are reportedly sponsoring Kabaddi teams participating in PKL. For example, Haryana Steelers and Bengal Warriors are sponsored by Dafa News.

In 2024, Pro Kabaddi League viewership crossed the 200 million mark during its 90th match, making Kabaddi the second sport after cricket to reach this milestone multiple times. The Pro Kabaddi League (PKL) Season 11 kicks off on October 18, 2024. 

According to a senior industry leader from the RMG sector, who spoke on the condition of anonymity, “These offshore companies pay black money to advertise their platforms on social media, TV, OTT, and other channels. These companies are not registered in India, and the government has acknowledged this through multiple advisories. PKL, as one of the premier sporting events in the country, is violating multiple guidelines which bans advertising and promoting betting and gambling platforms in India.”

Storyboard18 reached out to the PKL for a comment, but they have refused to comment on the issue.

The MIB had issued an advisory dated 3 October, 2022, instructing private television channels, digital news publishers and OTT platforms to refrain from showing advertisements of online gambling sites and surrogate ads. In the advisory, the ministry said such sites pose significant financial and socio-economic risks for consumers, especially youth and children.

<a href="https://www.storyboard18.com/how-it-works/as-govt-mulls-guidelines-experts-call-for-inclusion-of-digital-heavy-penalties-to-curb-surrogate-ads-36124.htm">Read more: As govt mulls guidelines, experts call for inclusion of digital, heavy penalties to curb surrogate ads</a>

Another RMG player Storyboard18 spoke to said, "The offshore betting and gambling companies have huge yearly budgets and they keep on trying new avenues in India to promote their illegal websites and apps as they don't pay any taxes in the country. On the other hand, legitimate RMG companies are struggling to survive the tax burden, we can't even think to sponsor such high-ticket IPs." 

The RMG company spokesperson said, "These surrogate advertisements of illegal betting and gambling platforms grossly violates the Consumer Protection Act, 2019 (CPA), the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (issued under the CPA), the Central Consumer Protection Authority’s (CCPA)"

<a href="https://www.storyboard18.com/how-it-works/exclusive-rmg-players-meet-mib-request-quality-seals-for-legitimate-games-40634.htm">Read more: EXCLUSIVE: RMG players meet MIB, request quality seals for legitimate games</a>

In light of these allegations, the controversy surrounding the Pro Kabaddi League’s association with illegal betting and gambling platforms raises questions around implementation of government advisories in the country. It will also be interesting if the newly elected Chairman of the Advertising Standards Council of India (ASCI) will flag such incidents of surrogate advertising to the government.

<a href="https://www.storyboard18.com/brand-makers/asci-to-stay-ahead-in-tech-curve-will-increase-focus-on-financial-sector-asci-chairman-41399.htm">Read more: ASCI to stay ahead in tech curve, will increase focus on financial sector: ASCI Chairman</a>

<a href="https://www.storyboard18.com/advertising/exclusive-meta-to-allow-alcohol-real-money-gambling-ads-on-its-platform-in-india-40062.htm">Read more: EXCLUSIVE: Meta to allow Alcohol, Real Money Gambling ads on its platform in India</a>

<a href="https://www.storyboard18.com/advertising/we-respect-local-laws-email-communication-lacked-precision-says-meta-40271.htm">Read more: 'We respect local laws, email communication lacked precision', says Meta</a>


  

EXCLUSIVE: PKL promoting offshore betting, gambling firms; RMG players complain to MIB

The Ministry of Information and Broadcasting on Monday issued two advisories, one for private television channels and the other for digital news publishers and OTT platforms strongly advising them to refrain from showing advertisements of online betting sites and surrogate advertisements of such sites. 

The Ministry had earlier issued an Advisory on 13 June, 2022 advising newspapers, private TV channels and digital news publishers to refrain from publishing advertisements of online betting platforms.

The advisory  states that it has come to ministry's notice that some online offshore betting platforms have started using news websites as a surrogate product to advertise their betting platforms on TV channels. The government has asked the private satellite television channels to refrain from broadcasting advertisements of online offshore betting platforms and/or their surrogate new s websites or any such product/service depicting these platforms in a surrogate manner.

Contravention/violation of the above may invite penal action under the applicable laws.

Some of the platforms ads flagged by the government include FairPlay News, 1XBAT, FUNBB.NET, Betwaynet, and Wolf111 News.

The government highlighted that betting and gambling is prohibited in most parts of the country, and pose significant financial and socio-economic risk for the consumers, especially youth and children.

“Accordingly, the promotion of offline or online betting/gambling through advertisements is not advised in larger public interest,” the advisory notes.

In accordance with the Paragraph 9 of the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements 2022 under the Consumer Protection Act, 2019, it has been observed that since betting and gambling is illegal, advertisements of online offshore betting and gambling platforms are also illegal.

“In this regard, it may be noted that in accordance with the Advertising Code under Cable TV Network Regulation Act 1995, advertisements of betting platforms, being an illegal activity, cannot be shown on TV channels,” it says.

The government also notes that the logos of surrogate news websites operated by the online betting platforms are strikingly similar to the betting platform. The concerned betting platforms, and the corresponding news websites, are also not registered with any legal authority under Indian laws. Accordingly, the online offshore betting platforms appear to be promoting betting and gambling under the garb of news as surrogate advertising which needs to be curbed.

The advisory further states that the Department of Consumer Affairs has also informed that online betting platforms have been advertising themselves as professional sports blogs, sports news websites, etc. while providing an indicative list of online betting platforms which are using news for surrogate advertising.

Govt warns digital publishers, channels and OTT platforms against online betting ads

SURROGATE ADVERTISING