The recent gambling operator’s proposal to implement a voluntary TV gambling advertising ban might fall short, it becomes clear only days after the announcement. In an article for The Times, Sky CEO Stephen van Rooyen raised concerns that the planned “whistle to whistle” ban on ads during live sports broadcasts was not covering most of the gambling advertising, which was, in fact, not on TV but on the digital domain.
Last week, Casino Guardian reported that the agreement for the advertising restriction had been reached by members of the Remote Gambling Association (RGA). The industry lobby group gathers more than 30 companies, including Europe’s and Britain’s biggest gambling and betting operators such as William Hill, bet365, Paddy Power and Ladbrokes. The majority of them have agreed to stop advertising during live sports events, following strong criticism over the large number of adverts aired on television during matches that are extremely popular with adults and children alike.
While the RGA is planning to implement this ban voluntarily after ratification from the Industry Group for Responsible Gambling (IGRG), Sky’s Stephen van Rooyen slammed the measure publicly in a comment piece for The Times, titled The Inconvenient Truth about Gambling Adverts. Rooyen, who has been a chief executive officer of UK & Ireland at Sky Plc since March 2016, writes that 80 per cent of all gambling advertising is, in fact, online. Digital advertising is still “largely unregulated”, he adds, citing official figures from a recent Gamble Aware research.
Gambling companies are spending five times more on online marketing than on TV ads, he writes. The gambling marketing spend on social media has increased more than three times in the past three years, Rooyen continues, claiming that it is precisely the online sector that is the least regulated and with the largest potential for causing harm. Moreover, this is where all the major gambling companies are promoting their services and pouring huge amounts of money on advertising.
Ban Unlikely to Affect Returns on TV Adverts, Yet Shares Drop
Last week, the proposed “whistle to whistle” ban reflected on the stock exchange, even if only slightly for some. On Thursday, GVC (GVC Holdings owns large betting brands like Ladbrokes and Coral) shares fell 5.6 per cent, while Paddy Power Betfair closed 2.8 per cent lower. Continuing a long trend, William Hill shares registered a seven-year low as the market closed Thursday evening and kept on dropping on Friday when they reached 157.25.
Despite the alarming drops on the stock exchange, investors should not be concerned that this might be a long-term trend, according to Irish wealth management company Davy Research. While companies’ TV marketing spend is massive – GVC Holdings and Paddy Power Betfair spend from £40 million to £50 million a year on advertisements on British TV, the returns are “modest”, Davy Research estimates. There should not be any significant changes in the projected earnings, the brokerage explains, although investors are apparently betting that revenues will be hit.
The impact, if such is to take place, is expected to be felt in football considering the financial value of the sponsorship deals and broadcast agreements between gambling companies, British football clubs and broadcasters. Horse racing is the only sport to be exempt from the advertising restrictions as it is believed that ads are crucial to its existence.
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Olivia Cole
