Sports broadcasting, gambling advertising and live odds – is further regulation needed?

Of the many Australian traditions, there is one which unifies the country irrespective of background and geographical location – sitting down to “Friday Night Footy” with friends and family. It is quite clearly a national pastime whose roots run deep and is sacrosanct in the eyes of many. Currently, there is a conversation being had as to the role of gambling, specifically the advertising of gambling in Australian sports.

The focal point of much of the ire of the public had been on Tom Waterhouse, owner of tomwaterhouse.com, one of the more popular online betting websites available to Australians. Online gambling was nothing new, but the levels of intrusion into Friday Night Football was getting too much for many Australians to handle. Waterhouse was often involved in match punditry, providing odds on the game itself, as well as upcoming horseraces. Complaints were made and Nine Network moved Waterhouse to a sponsored role where on the side-lines, he would provide the odds. Nonetheless, gambling advertising and Australian sports, (most notably rugby league and the AFL) had become inextricably linked.

In late April, Free TV Australia, (the industry body which represents all of Australia’s commercial free-to-air television licencees) submitted a proposal to amend the Commercial Television Code of Practice to prohibit commentators and their guests promoting live odds during matches. It did not go as far to ban sponsored segments to promote odds when games were not in play, such as advertising breaks. Tom Waterhouse would no longer serve as a ‘pundit’, but could quite clearly still advertise during the football.

On 26 May, Prime Minister Gillard announced to the Australian public that the proposals from Free TV did not go far enough and that Government would be asking the Australian broadcasters to draft a code which would inter alia, do the following:

  • A ban on all live odds during sporting events on television, by gambling entities and commentators; and
  • Generic gambling advertising would be limited to scheduled breaks in play, such as half-time or quarter time; and
  • Banners, sponsor logos and other broadcast promotions could not appear in play.

Gillard advocated that this approach would, ‘…get the balance right between protecting the community from gaming and the influence of gaming and making sure that there is an appropriate revenue stream for broadcast rights for our sporting codes.’ National Rugby League chief executive Dave Smith agreed that it was important that Government had intervened aiming to strike such a balance.1

Quite clearly, the driving force behind the move was to protect minors and vulnerable persons that gambling regulations often seek to attract. A common theme which ran through the Australian dialogue was that very need to protect children, as the PM stated, ‘I want kids to know their maths, but I don’t want them to learn their maths by watching live odds on sporting events.’ The Australian Government estimates that up to 500,000 Australians are at risk of becoming, or are problem gamblers.2 With that in mind, it was obvious that this would be a popular policy with much of the Australian public; a poll taken the week Gillard made her announcement showed that out of a sample of 1400 Australians, two-thirds supported a complete ban on gambling advertising, while 84% saw no place for gambling advertisements while children were watching television.3 That same week saw 20,000 people sign a petition to change gambling advertising laws in Australia.4

Some believe that these measures have not gone far enough. Richard Di Natale, a member of the Australian Greens from Victoria has issued a private members bill, the Broadcasting Services Amendment (Advertising for Sports Betting) Bill 2013. Amongst other things, the bill aims to prevent advertising or discussion of live odds at any time. Further, it prevents advertisements for gambling services before the watershed of 9pm. Lastly, it prohibits television licensees from accepting payment for the promotion of gambling services by commentators on sports broadcasts or their guests, which is aimed at preventing bookmakers from joining the pundits on-air.5 As to whether the bill will pass is yet to be seen, but it has not received the blessing of the Joint Select Committee on Gambling Reform in its latest report.

On 7 June, the Australian Parliamentary Joint Select Committee on Gambling Reform, which had been tasked with investigating advertising and promotion of gambling services in sport, reported early on its findings. The report welcomed the Government’s decision to ban live-odds and suggested that Government legislate in this area, if industry were not to make appropriate changes. Again, the overarching theme throughout the report was the need to act cautiously and pre-empt problems, thereby protecting minors from ‘normalisation’ of gambling through watching sport. It therefore recommended to Government that the current exemption of gambling advertising for sporting programs be reviewed and further research be taken out on the longer-term effects of gambling advertising on children. These are among the more important recommendations offered to the Government.

The question arises as to whether this is a case of a paternalistic Australian government garnering favour in the lead up to elections or whether this is a larger issue which is affecting other jurisdictions.

The United Kingdom

The British gambling industry had a gross gambling yield of £5.8 billion in 2011-2012, of which 12% of yield came from remote (online) gambling.6 It is of note that the majority of online gambling in the UK is run by overseas gambling companies, with 19 of the UK’s 20 largest remote gambling operators based offshore. The discourse in the UK has not necessarily been focussed on the need to limit or regulate live advertising of odds in-match (although the Guardian has addressed it), but rather, putting in a workable regulatory framework to make operators responsible to the public they serve.

The prevalence of advertising complaints made to the Advertising Standards Authority (ASA) grew six fold last year, but this was only in respect of a small number of adverts, representing 70% of the overall complaints in 2012.7 The ASA stated that it takes such complaints seriously, but the complaints were not focussed on the promotion of gambling itself, rather the content of the ad. A Paddy Power advert regarding transgendered women at race day, created 350 complaints of the total 873 received by the ASA that year.8

This is not to say that this is not a concern to the ASA. A spokesperson for the ASA asserted, ‘Many of the complaints that we receive about gambling ads are made on the grounds that they are misleading (exaggerate the chance of winning or promotions are administered unfairly)…’9 Yet gambling complaints to the regulatory body keep falling.10

Government has decided there is a need for reform, specifically in the remote sector, having published the Gambling (Licensing and Advertising) Bill 2013 in December 2012. The interesting policy change it makes is the change from a ‘point of production’ to a ‘point of consumption’ regulation model. Operators who sell and/or advertise to the British market, regardless of location will be required to obtain a gambling licence from the Gambling Commission. This will unequivocally bring a greater number of operators into the remit of the UK regulatory system. Previously offshore operators could benefit from being domiciled in one of the ‘White List’ jurisdictions whose governing structures were seen as acceptable and therefore could advertise to the UK.

Under the new scheme, remote gambling operators holding a licence must adhere to the UK advertising standards which domestic based remote, as well as, brick and mortar operators do, (namely, the ASA’s relevant advertising codes, as well as the CAP and BCAP codes). This guarantees that any advertising which falls foul of current and future codes of practice administered by the ASA and other relevant bodies will be sanctioned Currently advertisements must not:

  • Portray, condone or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm;
  • Exploit the susceptibilities, aspirations, credulity, inexperience or lack of knowledge of children, young people or other vulnerable people;
  • Suggest that gambling can be a solution to financial concerns;
  • Link gambling to seduction, sexual success or enhanced attractiveness; or
  • Be likely to be of particular appeal to children or young persons, especially by reflecting or being associated with youth culture.11

The ASA has the ability to refer the advertiser and the broadcaster to their respective regulatory body – both the Gambling Commission and Ofcom, if standards are not kept. Further, much like Australia, the gambling industry serving the UK market has its own voluntary advertising code, which limits the broadcasting of generic gambling advertising until after the 9pm watershed. Interestingly though, and much like Australia, the general advertising of sports betting is allowed during sports events, regardless of the hour. Australia has only made the step towards the total ban of live odds, (unless Di Natale’s bill passes). It will be interesting to see if the Australian experience influences this particular aspect of UK legislation going forward.

Europe

The United Kingdom is not alone in its review and reform of gambling regulations. Again, the focus of which has been on the remote sector and its relationship with European Union law. There is no shortage of literature on online gambling in Europe, having been the focal point of many publications, including the Schaldemose, Creutzmann and most recently, the Fox reports. Although, 425 amendments were received for the Fox report, a great majority adopted the theme of responsible advertising from operators. There are recommendations for a regulatory framework which, inter alia, creates common standards and enforcement measures for Member States, prohibitions on advertising by illegal operators, de minimis EU legislation and ‘codes of best practice’ on advertising by online operators, etc.12 In 2012, the European Commission explicitly stated that it was in the process of preparing a Recommendation on responsible gambling advertising, so as to ensure social responsibility and make sure key information is provided to the consumer.13 Needless to say, this issue is quite clearly at the forefront of European legislators’ concerns. Nonetheless, Member States are often having to deal with such issues before European legislators are able to.

Further, there are other interesting developments in Europe which could change the relationship of betting on sport. There is a push from sports rights holders, as well as European Parliament to recognise a ‘betting right’; that is a formal relationship between sports organisers and their gambling operator counterparts (online and offline), recognising a right in the organisation of their event itself.14 Gambling operators would pay for their exploitation of the event and then given licence to offer odds on it.The European Parliament resolution of 2 February 2012 on the European Dimension in Sport suggested that, ‘…betting on sport is a form of commercial exploitation of competitions and calls on the commission and the Member States to protect betting from unauthorised activities, from unlicensed operators and from suspicions of match fixing, in particular by recognising organisers’ property rights with regard to their competitions, guaranteeing a significant contribution from betting operators towards funding mass-participation and grassroots sports and by protecting the integrity of competitions with an emphasis on education for athletes…’15 Again, watch this space to see how gambling’s relationship with sports evolves on a European level – changes are quite clearly on the horizon.

France

ARJEL, the French online gambling regulator stated in a recent report that online gambling does not fall into any type of ordinary economic sector and advertising from gambling operators ‘…cannot evade strict supervision’.16 In the report, it recommended that gambling advertisements should be severely limited, suggesting one per hour as a benchmark. It further noted that legislation in France does not deal with online gambling advertising; strictly focussing at present on radio and television.17 France’s remote gambling market is still in its infancy, having opened in 2010. Revenues in sports betting are promising for the industry though, with the first quarter of 2013 showing a 17% increase in turnover.18 France’s highly regulated environment will be an important European touchstone on the advertising of gambling services, specifically in relation to sports.

Italy

A new gambling advertising self-regulatory code was introduced in late 2012. Two main provisions stand out in the new regulations. Firstly, programs which are intended for minors, either broadcast by television, radio or cinema, must not run any gambling ads. This includes the 30 minutes before and after the program runs. A top end fine of €500,000 awaits those who fall foul of the code, monitored by the aptly named, Monitoring Committee.

888′s Italian entity has been sanctioned under the new regulations for improper advertising. In the advert a player was depicted having a major win on his computer and coins rained down upon him. It was held by the Monitoring Committee and later the relevant court that this was quite clearly a breach of the code as it created the expectation of an easy win, without addressing the underlying addiction risks which gambling could create. It is quite clear that, along with France, Italy is taking a considered approach on the advertising of gambling services.

These are but two further examples of newly liberalised gambling markets and the recent trend towards limiting advertising in some European countries may not be conclusive. Contrast that with the sophisticated UK market, where live odds are part and parcel of most sporting events on television. Although the Gillard government has sparked debate in the UK19, are we that concerned? So long as those who advertise and sell to the UK market are forced to comply with the standards that the ASA and the Government set, should we not feel adequately protected or is there scope to push advertising of all gambling products past the watershed in order to protect minors? The Australians certainly think it is time to do so. Time will certainly tell if a pan-European gambling advertising code of conduct will be delivered from on high; in the interim, it seems clear the UK has quite capably taken this matter into its own hands through its ‘point of consumption’ regime. As usual, we will keep you informed on any developments.

References

1 ABC. Julia Gillard’s restrictions on live betting odds to be implemented by television networks. http://www.abc.net.au/news/2013-05-26/tv-networks-to-comply-with-gillard-live-betting-restrictions/4713476. May 27, 2013. 
2 http://www.problemgambling.gov.au/facts/
3 Sydney Morning Herald. Odds favour change to TV gambling ads. May 25, 2013.
4 Ibid.
5 Richard Di Natale. Explanatory Memorandum of the Broadcasting Services Amendment (Advertising for Sports Betting) Bill 2013. www.openaustralia.org. 15 May 2013.
6 Gambling Commission. Industry Statistics April 2009-March 2012. http://www.gamblingcommission.gov.uk/PDF/Industry%20stats%20April%202009%20-%20March%202012%20-%20December%202012v18.pdf 
7 Gambling Compliance. UK Gambling Ad Complaints Rocket – But Not Always because of Gambling. www.gamblingcompliance.com/node/51035. 28 Febuary 2013.
8 Ibid.
9 Ibid.
10 Ibid.
11 http://blog.dlapiper.com/gambling/resource/MarketingGamblingintheUK.pdf 
12 European Parliament. Amendments 1-425, Draft Report, Ashley Fox – on online gambling in the internal market. 2012/2322(INI) 18 April 2013.
13 European Commission. Towards a comprehensive European framework for online gambling. COM(2012) 596 final. 23 October 2012.
14 European Parliament. Report on the integrity of online gambling. (2008/2215(INI) 17 February 2009.
15 (2011/2087(INI)
16 Gambling Compliance. France’s ARJEL Backs New Limits on Advertising. www.gamblingcompliance.com/node/51449. 1 May 2013
17 Ibid.
18 Ibid.
19 http://www.guardian.co.uk/commentisfree/poll/2013/may/27/ban-sports-betting

Topics:  Advertising, EU, Gambling, Online Gaming, Sports, Sports Betting

Published In: Art, Entertainment & Sports Updates, General Business Updates, Communications & Media Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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