How Would a Gambling Sponsorship Ban Affect Football?

The sponsorship of football teams by gambling companies is now a ubiquitous feature of the English game, with eight out of 20 of the current teams in the Premier League and 16 out of 24 in the Championship being sponsored by bookmakers.

Gambling Sponsorships in Football

Three examples from the top-tier of English football at the time of writing are West Ham’s £10m-a-year agreement with Betway, Newcastle United net £7.5 million annually from Fun88 and Leeds United have a deal with SBOTOP worth a reputed £7.8m per season, according to the Daily Mail.

Advertising Methods

Advertising for gambling firms ranges from billboards, shirt sponsors, social media, and the full names of the lower three tiers of English football (SkyBet Championship, SkyBet League One and SkyBet League Two). The English Football League (EFL) claims that the industry contributes £40m a season to the league and its clubs and that this contribution is “as important now as it has ever been”.

The Problem with Gambling Sponsorships

Campaigners against this cosy relationship between football and gambling firms have pointed to the financial, social and mental health impacts gambling has across the UK, along with fears children could be swayed by glossy ad campaigns and be allowed to access sites with no age controls. YouGov estimates there are 1.4 million problem gamblers in the UK, with a further 3.6 million people indirectly harmed by someone else’s gambling, and with 55,000 children thought to have some form of gambling addiction.

In 2016, an in-depth study by the Institute for Public Policy Research estimated that the bill to the UK taxpayer dealing with problem gambling could be as much as £1.16 billion per annum, reflected in costs to the health service, housing, criminal justice and welfare/employment.

The Relationship Between Football & Gambling

A 2019 academic study of the close relationship between football and gambling in the UK concluded that said relationship supported the normalisation of gambling and related harms, questioned the sustainability of the current system, and further suggested that the government and legislators should review the Gambling Act 2005.

Another academic study on the relationship noted that:

Sports broadcasts offer gambling (and alcohol) companies a loophole to avoid the post-watershed guidelines, children and young people are also exposed. By marketing gambling in general and to children in particular, football contributes to an increase in the overall ‘amount’ of gambling in society.

In turn, this contributes to an increase in the prevalence of problem gambling (including gambling disorder) and all the associated harms. Furthermore, we argue that a significant amount of gambling profits come from problem gamblers. Therefore, football benefits from, and contributes to, the addictive consumption of gamblers.

In July 2020, as a response to public outcry, this culminated in a cross-party House of Lords Select Committee recommending in their report that shirt sponsorships of Premier League teams should be banned immediately, with the Championship ending association by 2023, and other leagues and sports phasing out sponsorship within three years.

What Do the Fans Think about Gambling Sponsorships?

In October 2020, Clean Up Gambling and its director Matt Zarb-Cousin commissioned a Polling by Survation survey, which revealed that over one-third of the 1,000 fans be put off buying their team’s shirt if it included sponsorship from a gambling firm. Furthermore, two-thirds of fans feel the ‘whistle to whistle’ measure (a gambling advertising ban on sports broadcasts before the 9 pm watershed), has not significantly reduced the overall level of gambling advertising.

The same proportion also agreed that gambling firms advertise disproportionately to football supporters. Zarb-Cousin added that “the government would have the backing of football fans if it decided to move against gambling ads, and clubs would benefit from an increase in shirt sales,” as detailed in an article in the Guardian.

Recovering Gambling Addicts

In February 2021, a group of recovering gambling addicts represented by charity the Big Step wrote to 11 clubs (Manchester City, Arsenal, Celtic, Leicester City, Newcastle United, Burnley, Watford, Norwich City, Nottingham Forest, Birmingham City and Coventry City) to address concerns over these teams publishing links to betting companies on social media in the runup to kick off.

The Premier League (who, significantly, does not have a sponsorship deal with betting firms like the EFL) has said it would be a “welcome participant” in the government review of the Gambling Act.

What Other Types of Sponsorships Are There?

In terms of the gambling industry, when comparing internationally at other top European leagues it would appear that the level of sponsorship and relationship between football and gambling is somewhat of a UK-specific anomaly.

An analysis of the highest-ranked 50 clubs in Europe showed that the top five industry sponsors for 2019 in terms of investment value were airlines (207 million euros), automotive firms (159 million euros), internet services (60 million euros), financial services (53 million euros) and telecoms companies (49 million euros), according to market and consumer data company Statista.

Other Sports with Gambling Sponsorships

This potential UK-wide ban does not only have the potential to impact football. Other sports, including boxing, snooker and darts all have lucrative agreements with various betting and gambling firms worth hundreds of millions of pounds per year.

Reports from January 2021 indicate that the government is considering a blanket ban on betting logos and insignia similar to those currently in force concerning the marketing of tobacco products.

How Much Revenue Could Potentially Be Lost?

It is currently unclear how much money would be lost if a gambling sponsorship ban was implemented. This would depend on the specific conditions and rules of such a ban, which remain under government review by the Department for Culture, Media and Sport until the end of March 2021.

However, a blanket ban on betting logos and insignia on kits could lead to a significant decrease in revenue for clubs and leagues. The combined income for Premier League and Championship teams from betting companies is thought to be in the region of £110 million per annum for shirt sponsorships alone.

Could There Be a Ban Across All Sports?

Sir Iain Duncan Smith MP, who is a member of the all-party parliamentary group on gambling harm, supported the proposed ban on shirt sponsorship but has urged the government to take bolder action and ban the industry and related advertising completely across sport in general.

He was quoted as saying that “banning gambling logos on sportswear would be a welcome step, but given the risks presented by gambling the government will need to deal with this issue more widely. A complete ban on gambling advertising is long overdue and this should be brought forward ahead of the upcoming gambling review”. The government may stop short of a full-scale ban but only time will tell, and this will be crucial in determining how much revenue could potentially be impacted.

The Final Decision Pending

Government sources from the Department for Digital, Culture, Media and Sport, insist that no final decision has yet been reached with a spokesperson telling media outlets that “we are undertaking a comprehensive review of gambling laws to make sure they are fit for the digital age. We are determined to tackle problem gambling in all its forms. No decisions have been taken.”

However, Lord Grade who headed up the House of Lords select committee in the summer of 2020 was scathing in his report and added that, “the behaviour of some gambling operators, where vulnerable people were targeted with inducements to continue gambling when the operators knew they could not afford to, shocked the committee.” According to a Guardian article, The Lords proposal also recommends the curbing and strict rollback of enticing “free bets”.

One area about which we found surprisingly little information was the amount of money betting firms spend on YouTube advertising for football highlights or football-related video content. Speaking from our personal experience, and as fans of the game ourselves, practically every single advertisement that comes up when we view such content online is from a betting or gambling firm.

Lower Division Teams Amongst Those Hardest Hit

Scottish football clubs, along with Championship teams and those in lower divisions, are predicted to be most affected by a potential ban as it is harder for them to gain sponsorship without the international allure that the Premier League offers potential investors as a global brand. Indeed, in March 2020, this was corroborated by David Forrest, Professor of Economics at the University of Liverpool and an expert in the sport and gambling industries.

In his written evidence to the House of Lords Select Committee when addressing the potential lack of new sponsors EFL and the Scottish Premiership, Prof Forrest stated that “there is little incentive for brands from other sectors to invest: they do not pick up enough exposure to potential customers, in contrast to the betting industry, which has an unusual proportion of customers for its product concentrated in the viewing audience for a sports event”. Prof Forrest went on to add that:

… many of these clubs and competitions would face difficulty in replacing their betting sponsors, compromising the scale at which they could operate and the quality of talent they could attract. It is striking that in jurisdictions which have moved against sponsorship and advertising by the betting sector—Australia and Italy—opposition from the betting industry has been muted but that from sports leagues and broadcasters strong.

This may reveal that betting houses themselves perceive their marketing as about brand share rather than extending the market and there would be some advantage to them from the state doing what competition law prevents them from doing for themselves—negotiating away heavy marketing budgets which just cancel each other out. However, sports leagues will typically fight against restrictions because their finances are precarious … English football has the largest structure of professional clubs in the world and shrinkage would likely take the form of fewer towns being served by a professional club.

Football Club Concerns

From the gambling industry itself, there is a considerable level of concern not only for their revenue streams but those of football clubs. Neil Banbury is the UK head of the Kindred Group which includes 32Red amongst its brands, and whose company has shirt sponsorship deals with Championship sides Middlesbrough, Derby, Preston and Scottish Premiership leaders Rangers. He gave an extensive interview on the subject saying that “especially in the Football League, the sponsors and principal partnerships that are there, that’s a big part of a club’s commercial income.” He went on:

Clearly, there are other industries that can get involved but there’s also a price point at which these sponsorship deals get done. Ultimately, if the buyers in that market gets heavily restricted then the price will go down, so clubs will be facing reduced income streams at a time where they have got plenty of income stream challenges outside of the sponsorship, world so there’s potential for significant impact.

Reduction of Sponsorship Deals

One possible side-effect of a gambling sponsorship ban is that this could significantly decrease the price companies would have to pay for sponsorship deals with teams who are currently sponsored by gambling firms, as they would require new sponsors, and fast. Some experts, such as Joel Seymour-Hyde, the UK managing director of sports sponsorship specialist Octagonm have put this reduction in sponsorship deals at somewhere between 25% and 50%.

In the same interview, Seymour-Hyde was quoted as saying that “new sponsors could enter the market, as happened at the height of the 2008-10 global financial crisis. Brands who may have been priced out by betting brands or didn’t want to be associated with a market cluttered with betting may also suddenly emerge,”.

He added that there has been an abundance of “Relatively ‘easy money’ from overseas betting brands like Fun88 and LoveBet would be hard to replace in the first one or two years – particularly for those clubs outside the Premier League Top 6 and in the Championship, who have been reliant on this revenue source for some time.”

The Popularity of Football Will Prevail

However due to the sheer popularity of football, and especially English football around the world, Seymour-Hyde believes that even if short-term revenues fall, in time the ship will be steadied, “ultimately in the long run, the market will correct, clubs will adapt, and when we’re all bored of online car retailers and FX trading platforms sponsoring our teams, maybe a new saviour will emerge.”

Furthermore, from what we know of the potential ban, so far only teams in the Premier League would be obliged to immediately cease dealings with gambling and betting firms with the Championship being allowed to continue until 2023 and lower leagues until 2024. Arguably this would give valuable contingency time to non-Premier League sides to find alternative sponsorship and prepare club revenue streams for any potential shortfalls as a result of the ban.

However, as in football itself, nothing is certain yet in terms of what the government will inevitably decide. But we can be certain that its final decision will be felt strongly throughout football in the UK one way or another for many years to come.