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UK's gambling companies agree to TV ad ban

View profile for Stephen Hornsby
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This article first appeared in Sportcal.

The UK’s largest gambling companies have agreed a voluntary ban on advertising during live television coverage of sport amid increasing concerns over the harmful effects of gambling addiction, especially among young people.

Under the agreement with the Remote Gambling Association, which includes some of the country largest bookmakers, including Bet365, Ladbrokes, Paddy Power, SkyBet, Betfred, Betfair, Stan James, Gala Coral and William Hill, no gambling adverts will be shown during live match coverage, and perhaps for a defined period before and after a match.

The ban could have profound implications for sponsorship of soccer clubs, given that nine of the 20 clubs in English soccer’s top-tier Premier League and 17 of the 24 second-tier Championship clubs have shirt deals with companies from the betting sector. Perimeter advertising by betting companies at televised matches could also be affected.

Stephen Hornsby, a sports lawyer at UK law firm Goodman Derrick, told Sportcal thathe expected no immediate action over jersey sponsorships by gambling companies, saying: “Voluntary codes are the classic ‘head-them-off-at-the-pass’ strategy designed to stop legislation. I think they will let this one sink in before anything else is offered on shirts etc.”

Meanwhile, Alex Kelham, a partner at UK law firm Lewis Silkin, said: “In some respect sports may be rubbing their hands, in that if betting companies are not spending their marketing budget on TV ads, they are likely to spend more on sponsorship and perimeter boards!

However clubs get most of their money from broadcast rights, and this agreement may mean the value of broadcast deals go down, which will hit the clubs hard in the long run. Clubs are also likely to come under the same criticism as broadcasters have and may feel pressure to reduce the exposure they currently offer to betting companies. If the industry takes the next step and withdraws from shirt sponsorship, or the government or sporting authorities impose a ban on betting sponsors, sport will take a huge hit financially.

We recently saw Italy introduce a blanket ban on betting advertising, which includes betting sponsorship, so a precedent has been set.

The US sports market will be paying close attention to this development too. The liberalisation of sports betting in the US has been seen as a huge financial opportunity for the US sports leagues and clubs, but there is still a strong sense of caution in some quarters which may see this latest news used to lobby against sports betting sponsorship and advertising, which would obviously massively reduce the value of the opportunity which has just been opened up.”

The agreement comes after more than 90 minutes of advertisements were shown during this summer’s Fifa World Cup, with anti-gambling campaigners arguing that such advertising ‘normalises’ betting. The ban excludes horse racing because of its reliance on gambling revenues, but all other sports are covered.

Last month, pay-TV operator Sky said it would be imposing a limit of one gambling advertisement per commercial break on its channels from the start of the 2019-20 soccer season. At present, up to four such commercials go out in each break as betting companies look to attract in-play bets.

The moves come amid escalating fears among UK politicians, regulators and the public over the amount of commercial messaging for betting companies in sports coverage, in particular its contribution to problem gambling and impact on young audiences.

In September, the opposition Labour Party called for a ban on all betting advertising in live TV sports coverage, and proposed a 1-per-cent levy on operators’ gross gambling yield to help tackle problem gambling.

Final ratification of the ban by the Industry Group for Responsible Gambling (IGRG) is expected later this month or in early 2019.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.