Promotional Nightmares: part two

In the second part of iGaming Business' analysis of gambling advertising restrictions, we look at the unintended consequences of bans, possible alternatives to blanket prohibitions – and ask whether tackling advertising really gets to the root cause of the issue. Read part one here.

DLA Piper’s Giulio Coraggio argues that by restricting advertising, legislators could even risk exacerbating problems.

“If no gambling ad can be aired before 10.30pm or on specific channels, this obviously creates a concentration of gambling ads at a specific time of the day or on specific channels,” he explains.

This, he says, effectively ensures that customers will feel they are being bombarded with gambling ads. Rather than setting out how and when these ads can be shown, he argues that restrictions on how many can be broadcast could be more effective.

This approach is already being pursued by Sky, which announced last year that it would only allow one gambling ad to be broadcast during each commercial break, from the start of the 2019-20 football season.

Not to be outdone, the UK betting sector then announced a voluntary ban on all gambling advertising before and after the start of sports broadcasts: the whistle-to-whistle ban. This also applies to all highlights shows and includes sponsorship of these programmes.

Campaigners have already pointed out that viewers will still see plenty of gambling branding on football shirts and pitch-side advertising hoardings, while Sky CEO Stephen van Rooyen has attacked the move as a deflection tactic, given the bulk of operator marketing spend is focused online.

Woodford, for his part, argues that whistle-to-whistle bans will have little positive effect, saying they will have a “damaging” economic effect on the UK’s commercial media landscape.

Furthermore, he says it will only serve to hit consumers in the wallet. With sports broadcasting rights sold for billions, the broadcasters then look to recoup their investment through advertising sales.

If they lose their main advertisers, they will inevitably look to increase the price of subscription packages for sports channels. They may be protected, but they will effectively pay for this protection.

He says that the current self regulatory framework, developed in partnership with the Gambling Commission, already does much to restrict minors’ exposure to gambling advertising and to ensure that promotions are socially responsible.

“Advertising self-regulation has the advantage of consensus-building through industry dialogue which leads to more business certainty,” Woodford continues. “It is also cost-effective (regulation at no cost to the taxpayer), flexible and evidence-based, achieving a good balance between consumer protection and business interests.”

It is important to notice that a key driver behind the growing appetite for gambling advertising restrictions is a perceived growth in the prevalence of problem gambling.

This has been thrown into sharp focus by a rapid rise in the number of fines issued for historical infractions of licence conditions by operators. In the UK alone, the Gambling Commission has handed out more than £47m in fines and penalty packages since 2015.

The vast majority of cases stem from failings in operators’ social responsibility processes, with action not taken to check the source of their funds, or to intervene when player spend rapidly increases. This suggests failings are to be found in a different part of their business – though most are historical – and are only announced after the issue has been addressed.

It could ultimately be argued that these past failings are simply having an effect on operators’ present activities. This, in turn, is prompting politicians to grab for the low-hanging fruit of attacking the gambling industry. Yet this may ultimately lead to an outright ban on gambling, which is clearly the goal of many campaigners.

2019, then, is a crucial year for the industry in Europe; how operators address the shift in public opinion and work with governments and regulators over the coming months could define the sector’s long-term future.