Positives derived from yesterday’s UK government statement on offshore betting sponsorships in British sports will outweigh the negatives, if any, according to initial reactions from industry stakeholders.
The Department for Culture, Media and Sport (DCMS) took a firm stance against the presence of unlicensed operators in sports, particularly as sponsors of football teams in the globally-recognised Premier League.
Culture Secretary Lisa Nandy confirmed that the DCMS will begin consulting this spring on potential measures to completely remove such partnerships from football and sports as a whole.
As a reminder, multiple Premier League teams are currently sponsored by operators that are not licensed by the UK Gambling Commission (UKGC). These include Fulham (SBOTOP), Bournemouth (bj88), Wolves (DEBET), Burnley (96.com), and Everton (Stake.com).
SBC News has reached out to all five teams for a comment.
The clubs’ partner brands were previously all holders of a UKGC licence, secured by white-label company TGP Europe. Last year, however, TGP Europe was forced to withdraw from the UK after being hit by a £3.3m penalty by the regulator, leaving the operators unlicensed. Stake, meanwhile, had already exited the UK two months prior.
Still, the teams currently partnered with them are theoretically not breaking any laws, as long as their websites are inaccessible by UK consumers, which they typically are. However, these geoblocks become easily circumventable when using a VPN service.
This was one of the points raised by Richard Bradley, partner at law firm Poppleston Allen, who foresaw a number of prospects resulting from the potential crackdown.
“The unlicensed sector is not necessarily illegal – if customers in the UK cannot access those websites – however, there are easy bypasses such as a VPN to do so, which takes revenue away from British operators,” he said.
“Another benefit of the proposed ban is that it provides assurance for customers in the UK that marketing of gambling products via sponsorship is only for those appropriately licensed operators who are subject to the UK’s stringent regulatory standards.
“This is also about customer protection as if legal advertising is only of British licensed products, there will be operational safeguards for players in GB, such as social responsibility controls and contractual protections. With the unlicensed sector, there is no guarantee of these sorts of vital player protections.”
An opportunity for the white market?
Bradley added that while some may think this would negatively impact the clubs’ advertising revenue, it could actually present an opportunity for licensed operators to step in and become sponsors instead.
“Finally, the proposed ban also provides tacit support for the licensed gambling industry in the UK and could assist in countering the black market.”
Bradley’s comments were echoed in those of Adam Rivers, Managing Director at consulting agency Alvarez & Marsal, who foresees a positive response from the licensed sector.
“This will be welcomed by the industry, as sponsorship by unlicensed operators risks blurring the distinction between licensed and unlicensed brands in the eyes of consumers.
“That said, the Premier League sponsors [the ban] is aimed at are already actively blocking British consumers from accessing their sites, and front-of-shirt sponsorship by gambling operators will cease at the end of the season in any case.
“As a result, the impact on those operators – and on the broader illicit market – is likely to be modest compared with the measures we expect the cross-industry taskforce to pursue in the near future.”
The taskforce Rivers referred to is the Illegal Gambling Taskforce, announced by Gambling Minister Baroness Twycross at the end of January as a cross-sector initiative to combat the black market by coordinating efforts between regulators, gambling stakeholders, and technology providers.
As expected, the licensed market also took well to the plans announced by the DCMS, with the Betting and Gaming Council (BGC) expressing full support for Nandy’s initiative.
A spokesperson for the trade body commented: “Culture Secretary Lisa Nandy is right that gambling companies without a UK licence should be banned from sponsoring Premier League clubs and should go further to prevent these harmful illegal companies from sponsoring any sport in the UK.
“At a time when the regulated sector is facing significantly higher taxation and ever tighter regulation while reducing advertising spend, it is more important than ever that firm action is taken against the growing harmful black market.”
Coming this April, the Remote Gaming Duty will rise from 21% to 40%, and although still not in effect, this has already left an impact on UK licensed gaming operators. Various firms have been
William Hill dialled down its international presence shortly before the tax hikes, as it anticipates the increased tax expenditures. Rank Group also deployed strategic cost reduction plans to mitigate the April hikes, while Intralot outright stated that it expects revenue stagnation in the UK.
However, the new sponsorship opportunities that will present themselves within sports could prove to be the much-needed platform to bounce back up – though this will depend on how far operators’ marketing budgets can stretch.