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NEWS 5 November 2018
Why Sky’s advertising proposals are a perfect storm for the gambling industry
By Tim Poole

"Unbelievable, Jeff!"

According to Nielsen research, UK gambling companies spent £430m ($560m) on advertising between 2012 and 2017, with the annual amount almost doubling from £64m in 2012 to £127m in 2016.

"If you like that, check out this great offer, your smarts will definitely tell you this is the place to be!"

No wonder critics claim there’s too much gambling advertising on television.

Recently, however, Sky has devised a set of proposals to reduce the amount of gambling adverts on TV. Believe it or not, the broadcaster’s suggestions are great news for the gambling industry...

The proposals

Sky’s plans are straightforward. From next August, coinciding with the new Premier League season, the broadcaster will impose a limit of one in-play gambling advertisement per commercial break (currently, this can be up to four).

The restrictions will apply to all channels Sky sells advertising slots for, including Channel 5, all Sky channels on Virgin Media and in Ireland.

In addition, a new AdSmart system will be introduced in 2020, allowing viewers the choice to remove all gambling adverts.

The reaction

Immediate reaction has been unanimously positive. Jeremy Wright, UK Culture Secretary, commented: "It's an important and very welcome move that will better protect vulnerable people from the impact of gambling-related harm."

Stephen van Rooyen, Sky UK CEO, said: "Our customers are worried about gambling ads on TV – and we understand their concerns. That’s why we’ve committed to limiting the amount of gambling ads on Sky and better protecting those vulnerable to problem gambling."

Meanwhile, rival broadcaster BT added: "While we already limit the number of gambling adverts shown on our channels, we will continue to review our approach to bookmakers advertising and work closely with the ASA and other appropriate stakeholders."

PaddyPower Co-founder and former CEO Stewart Kenny also told the Irish Times: "These two initiatives are welcome, as the bombardment of sports programmes with gambling advertising was normalising gambling for children."

How will it affect operators?

At face value, those most likely to lose out if Sky’s new policy is implemented are gambling operators.

Make no mistake, Sky will not lose money here. Sky Sports slots are auctioned off and, with supply falling and demand remaining constant, the price per slot will naturally rise. Operators will spend more and lose money.

But the industry benefits will be plentiful. Less adverts and a higher price per slot will encourage better-quality ads. There will be a greater need to stand out, to show more creativity and to focus less on price, price, price followed by offer, offer, offer.

Suddenly, gambling operators may well find a greater response from one advert than a string of mediocre, repetitive offerings.

What can the biggest online sportsbooks in the world – already known by most watching – say in five adverts that they can’t in one?

For smaller operators, it has undeniably been a tougher week. The Budget’s announcement of an increase in remote gaming duty will hit them the hardest, while big companies can afford higher television advertising fees, further marginalising their rivals if Sky’s plans are carried out.

Even this, though, hardly spells disaster for smaller brands, who generally tend not to advertise on television – and often level the playing field with far more generous acquisition offers.

In the long run, moreover, bottom lines will be much healthier than if industry inaction causes a total advertising ban. After all, ignoring calls to regulate fixed-odds betting terminals (FOBT) was hardly one of the UK gambling sector’s finest decisions.

The shoe on the other foot

Sky’s proposals are a superior alternative to any form of ban. Every single analyst Gambling Insider has spoken to in recent months has argued against advertising prohibitions. Gamblers will gamble with or without advertising. Adverts give regulated operators the chance to stand out and detract bettors from using unlicensed, unregulated sites.

Sky’s plans also have two ancillary benefits. One: the various leaders within the gambling industry calling for a reduction in advertising will have their true belief in the measure tested. Some companies have gone as far as suggesting less advertising would save them tens of millions of pounds annually and give high-street operators a boost over online-only rivals. Let’s see.

Secondly, the shoe will finally fit the other foot politically. Here lies a mainstream move that can be seen by the wider public to be supported by the gambling industry.

Image is everything. If an operator introduces a new self-exclusion scheme or tighter anti-money laundering protocol, it can’t exactly be beamed as breaking news to every household in the country.

This can.

It can subsequently be used against those who lobby politically – often inaccurately – against the gambling industry on an emotional-but-not-evidence-based mantra.

While Tracey Crouch resigned as Sports Minister quoting figures that two people a week commit gambling-related suicides, she provided not one iota of evidence. Yet those figures get widely publicised once cited by a figure of authority. There has been speculation the study rererenced was from 2010 and referred to citizens of Hong Kong. Gambling Insider has contacted her to clarify this.

If Sky’s proposals are implemented, similar baseless comments directed towards advertising directors can be batted away for a home run. It’s as close to self-regulation as it gets.

A perfect storm

Gambling Commission Programme Director Ian Angus recently warned gambling companies a "storm" is coming if they don’t improve the standard of their adverts. In this case, however, it's a perfect storm for the gambling industry.

With the fallout from the delay of the FOBT maximum stake reduction overshadowing Responsible Gambling Week, Sky’s idea has given the industry an open goal to score a positive PR story. If those with an anti-gambling agenda rely so heavily on dragging down the industry’s reputation, why shouldn’t the industry nullify their greatest weapon?

All the while, gambling advertising will inherently improve. Your “smarts” should tell you that’s a win-win situation for everyone.

RELATED TAGS: Legal & Regulatory
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