The Advertising Standards Authority has declined to rule on whether front page stories in the Daily Express and Star newspapers breached its rules saying that this was beyond its "remit".
Philip Cowan, a senior lecturer in journalism at the University of Hertfordshire, complained over a Daily Express front page from last September which carried the headline: "NEW LOTTERY TO MAKE BRITAIN BETTER".
Sister title the Daily Star carried a front page story saying: "£50m LOTTO TONIC FOR BRITAIN."
Cowan claimed that both stories broke the ASA code by promoting the Health Lottery launched by Express Newspapers owner Richard Desmond.
But an ASA spokesman told Press Gazette: "The newspaper stories were classed as outside the ASA's remit because the material did not meet the two criteria outlined in the Advertising Code for what constitutes an 'advertisement feature'.
"Section III, subsection k states 'An advertorial is an advertisement feature, announcement or promotion, the content of which is controlled by the marketer, not the publisher, that is disseminated in exchange for a payment or other reciprocal arrangement.'
"During our initial investigation into this matter we were satisfied that editorial control did not rest with the marketer and there was no reciprocal arrangement. The articles were not therefore 'advertisements' for the purposes of the code."
Cowan said: "I am, of course, disappointed with the decision, although I appreciate the ASA's reasoning. Nevertheless, it comes down to their interpretation of their own rules and they have baulked at the prospect of following the spirit of their own regulations rather than the letter.
"Clearly, The Express, which is owned by Northern & Shell has been used to promote The Health Lottery, which is also owned by Northern & Shell. It is quite simply outrageous that the company can use a national newspaper to promote its own business in such a blatant way. It is a direct challenge to any sort of lenient or self-regulation.
"We are in a serious situation, with the PCC powerless and the ASA now washing its hands, Northern & Shell can simply run amok. That can only reduce the reputation of the industry even further at a time when it is under close scrutiny. The last thing we need is a rogue company on the loose when everyone is trying to look squeaky clean for the Leveson Inquiry."
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