iGaming Daily

:
The British government is turning its attention once again to football's relationship with betting and is set to enforce a new restriction for sponsorship deals in the country. Whether this is a political move or an effective measure to elevate consumer protection standards in the country shall remain to be seen, and that's exactly what we will be judging today. Welcome to iGaming Daily brought to you by OptiMove, the creator of positionalist marketing and number one player engagement solution for iGaming and sports betting operators. I'm Fernando Nott, media manager for SBC and your host for today. And I'm joined by our two jurors of the day, uh editor for SBC News, Ted Aronclay. Ted, how are you today? I'm very, very well. Thank you, Fernando. Thank you for calling me up onto jury duty for this one. Yeah. Yeah. Big topic. Big topic. big topic and another quality juror, Joe Streeter, editor for iGaming Expert. Joe, how are you? I'm great. Thanks Fernando. Some really good SBC Digital Day yesterday to uh shout Jack and the team out. Yeah, really insightful day. So anybody that hasn't checked that out definitely should and some big developments in the UK as well. So I'm excited to talk to you two guys about that today. And I hope you brought your best judging skills today. But first, let's start by breaking down the story. Why don't we just tell the audience what happened? Well, um can, I think I can jump in here. So the, government has been making a bit more of clear commitment against tackling illegal gambling lately. The, that included the setting up of a task force a few weeks ago. This, this, um, The announcement this week is separate to that, but I think it does fall in line with a wider theme really. And what we've seen this week is the Department of m Media, Culture and Sport, DCMS, which is the government department, which has a role in overseeing gambling. uh Baroness Twycloss is the minister at that department in charge of overseeing the industry. DCMS launched a consultation this week about whether to to ban sponsorship deals between sports clubs. That's any team across British sport as well, we should add, not just those in the Premier League of English football. This consultation is whether to ban anyone from British sports from having sponsorship deals with betting companies that are unlicensed. I think this is something we'll discuss a later, but that is a key term here, is unlicensed, not necessarily illegal. But this is something that... has been quite a big talking point for a number of years now, particularly within the context of the wider debate about the football sponsorship and gambling and betting and gaming's visibility in day-to-day life in the UK and particularly in football. So it is quite a big moment to see the government weigh in officially on that in some respect. uh Joe, what's your view on this? You and me have been covering this for quite some time now. Yeah, it's quite the development head, right? And it's something kind of an idea that we've kind of spoken about and almost, I guess, maybe like a blind spot in the regulation that we've spoken about for a long time as we've kind of, you know, looked ahead of the lay of the land for sponsorships and for gambling's relationship with football, especially at a time when uh front of shirt partners, front of shirt gambling partners are going to be prohibited from next year. was a regulation implemented by the industry. yeah, as that change happens, um we've kind of assessed this state of play between the relationship between operators that aren't licensed in the UK um and football in general. But you raise a good point that um this is all sports clubs, this is all kind of sporting clubs, but let's be completely honest. The big impact will happen in the Premier League. um yeah, there's a lot to take home from that. And we're going go into the weeds of this story. before we do, I would just like to say, it was starting the year off the back of a tumultuous year last year. It was nice to have the industry and the UK government aligned. They found synergy on something. They were harmonious after all the disruptions last year. This got industry support from the BGC and from Entain. So yeah, the UK government and the industry hand in hand in this fight against the black market. Yeah, very good to see. That is one element of this uh subplot of this story that is good to see. And Joe, you mentioned the self-regulatory measure that the industry enforced together with the Premier League to end front of shared sponsorships. m That probably comes after, like you said, a little boil in the regulation. Do you guys think, let's start with Joe, this is uh about market control and regulatory credibility or is this a sponsorship consultation primarily about consumer protection? It's a great uh question. I think it's kind of one of a number of things and think uh kind of multiple things can be true. You know, can be billed as being about consumer protection. But I think as Ted said, this is not kind of a uh one-off isolated measure out the blue where we're like, oh, they're taking action against the black market. This is kind of part of a wave of action, a part of a real concerted effort to try and tackle the black market and not just tackle the black market, but sway that momentum away from the black market and towards the regulated market. um Yeah, and I think there's been real pressure as well from the regulated industry and rightly so um that, you know, as marketing restrictions um tighten around the regulated market, we've seen some real tough ASA rulings, we've seen a variety of kind of tough marketing measures along how they can advertise. uh The unregulated market has been left to advertise freely and is very aggressive with its marketing. I think this is kind of a gesture to show that that is somewhat acknowledged. My personal take on it is that um the gambling industry, the Premier League is such a global product that I think it's a tough one to kind of stop sponsorship for global brands. Other industries um advertise globally, they pinpoint markets outside of the UK through the Premier League because the Premier League is such a... global brand, we've seen it with crypto, seen it with the financial services. I think that is what gambling industry operators largely do when they advertise with Premier League operators, with Premier League clubs. There's also a real level of trust that comes with the Premier League. It's a trusted brand globally and you can lend a lot of credibility as a betting operator to your brand, whether it's in Asia or Africa, to your brand through being associated with the Premier League and through being a partner of Sunderland or Bournemouth. think that was what Stella David called the black market derby because they both have frontal shirt sponsors that are unlicensed operators. So you can really lend credibility just by having an asset, whether it's the side of the pitch, perimeter or Whether it's a sleeve sponsorship, it really, yeah, it can boost the trust within your brand, I think, for an Asian or an African brand. So yeah, an interesting move. yeah. And together with this decision, the government is also launching a cross-industry task force, which involves banks, tech platforms, and law enforcement. How realistic is this coordinated uh enforcement at that scale? Do you think that um it might work? this cross jurisdiction, let's say, effort may be too difficult to actually enforce. It's an interesting question, Fernando. I mean, yeah, it will be a challenge. I don't think that's in doubt. Like I said, there's a lot of different stakeholders involved here. There's a lot of cross-sector concerns. The topic of the black market, unlicensed betting, illicit betting, whatever you want to call it. It is something that doesn't just impact the gambling sector. We've already seen how it interacts with sport. Obviously, advertising a large social media is a really important element of it. Tim Miller from the gambling commission referenced that speech at ICE earlier this year. That's something that the commission and regulated operators have been talking about for some time anyway. A really core part of it as well is payments. em the need to set up effective blocking measures against payments from consumers to m the illicit market. I think in a speech today at the BGC's AGM, Tim Miller also mentioned crypto assets and he noted about how prevalent cryptocurrency payments are in enabling that transfer of funds from the consumer to the black market. That's something else that they need to look at. Yeah, it will be a challenge to take a big holistic overall view of this, but it is really necessary. think it is, and while it may be difficult, is something that I do think the government and the different stakeholders are capable of doing. We've already seen, particularly if we just look at, let's say the financial services element, the banking element, we've already seen some good cross collaborations there around responsible gaming, know, the setting up of gaming trans... transaction blocks, Monzo were quite active in that I think. They quite regularly report how many people are using those actually. I believe Santander have also been working quite closely with the sector in the past around responsible gaming initiatives. Over in the Republic of Ireland we've seen, I believe it's the country's four biggest banks are all now... uh, have, have, uh, initiatives and, uh, controls in place around, uh, gambling, um, limitations around, I mainly around responsible gaming and, uh, play and like customer protection. But I don't, you know, based on the, on, on these, uh, existing projects and existing measures, I don't really see any reason why that can't then be extended to working with the industry and working with the government to prevent transfer of funds to the illegal market. If you see what I mean. Yeah. Uh, I just really want to echo what Ted said there. There's a really valuable point that, you know, targeting payments, targeting IPs and targeting payments, that's really cutting this off at source. And that is how you are going to effectively strangle the black market. um know, the tackling marketing is important, but, and as Ted said, again, social media, that's where the really prevalent and really effective marketing takes place for unlicensed operators. in the UK, advertisers are the most vulnerable as well with things like non-gam stop casinos. But if you can cut it off at source and if you can really target the payments, that is how this is going to be effective. Yeah, I agree with Ted is basically what I'm saying. big one is going to be getting social media on board, isn't it really, and figuring out how to effectively prevent the proliferation of... em of black market companies on there. We've seen it before of firms putting their watermark over accounts that are then distributed, content distributed, mass market are pushed all over the place and that putting their brand name out there, influencers as well, who often might be of a company without realizing that it's unlicensed in the UK em or illegally active in the UK. That's going to be As much as I've said, I think we can see some good progress in the financial service and payments area if it's taken seriously. Yeah, the social media side of things could be even trickier. was really echoed in Tim Miller's speech that you mentioned, Ted, as well. He was quite scathing about meta and their lack of action and kind of felt like willful ignorance, he was hinting at when it came to the most aggressive and immoral types of adverts that you do see on social media. yeah, that point was very much echoed by Tim Millar. It's now just about kind of uh putting the action and focusing the action in on that kind of remit. Yeah. Football sponsorships definitely take the spotlight in terms of the promotion of the betting industry, but there's a lot of sides to it. And social media is definitely the up there together with sponsorships. I want to continue discussing this topic from a different angle, like the impact on the sports clubs that will definitely see their income affected by this measure. But right now we're going to do a very quick break and we will be right back to continue discussing this measure in the United Kingdom. We'll be right back. And we're back with more iGaming Daily to continue discussing the latest decision by the UK government to go after betting sponsorships from offshore operators mainly. I wanted to ask before we go into the football clubs and the sports clubs impact or how this will impact on them. Do you think offshore operators will change tactics to an extent that the government will have to block a different hole next, let's say influencer marketing or something like that. That's a very good question. I yeah, to kind of build just off what you've said there for the influencer marketing, think it definitely would become quite, we might see an increase in that. That's still quite a valuable tool for them. One that clearly isn't eh on the government's radar as much yet as the sponsorship. You know, one of the reasons why sponsorship is on there so much, and we've already mentioned this before, is that It's just been such a public issue in the UK lately. It's been so widely discussed politically. If you look back at like discussions in the House of Commons and so on, you'll always find mentions of betting companies in the Premier League, betting companies in the EFL. Yeah, just the proliferation of em betting logos in sports and particularly in football. The only time you'll ever really see social media get mentioned there is within that context of saying, know, oh, well, I saw some MP are we saying, oh, I saw the logos of a betting firm on the social media channel of uh X United FC em on social media and so on. The influence thing isn't really been brought into that. So I think maybe that could be, we might start seeing some more activity there. Maybe if you want to be a bit more optimistic, we could potentially say, well, maybe these companies that targeting, that want visibility in the Premier League will decide to regulate and get licenses. em As Joe's already mentioned, of the reasons why companies, these offshore firms want visibility in the Premier League is because of the league's global presence and global reach. So maybe they'd think, well, if it's worth the price of us getting regulated in the UK, getting licensed in the UK in order to maintain these partnerships, it's worth it. Maybe that's bit of an optimistic viewpoint though. There could be a myriad of reasons why certain companies don't want the UK Gambler Commission looking through their background. Joe, what's your view on that? uh Ferdinand, Ted, I think you're being very optimistic there with the UK licensing perspective. And Ferdinand, in response to your original question, I don't think they're going to change their approach because... If I'm honest, don't think that for the most part anyway, obviously I'm being a bit general here, but I think for the most part when Asia facing brands or Africa facing brands that don't have a license in the UK are advertising via the Premier League and that they're getting Premier League assets. And that's where the majority of these operators are advertising. in the Premier League. um I don't think they're trying to appeal to a UK audience. I think they're trying to boost their Asia facing brand or their African operations. So I don't think there's a gap to plug in. I the gap that needs plugging is via social media and via streamers and things like that. So that gap is still going to be there. don't think any gap is being plugged um by taking them off of sleeves in the Premier League or assets in the Premier League. That being said, in the battle against the black market, um it's a strong token gesture. It's a strong gesture to show that there is a lack of leniency towards unlicensed operations in the UK. yeah, I don't think these operators will take a new approach because maybe they'll advertise in different European leagues or with different European sporting organizations to get that credibility in the Asian market. Yeah, I mean, that was kind of my point though there, Joe. it's like, look, Dungaburra, I know I'm going to sound like I'm backtracking. I said the optimistic viewpoint could be that, but yeah, these companies are, like you say, targeting Asia and Africa. What more my point was, perhaps in some cases, and again, I'm saying this is a very unlikely scenario. they could consider, well, if we can get a UK license purely to maintain that partnership so we can carry on getting the Premier League's visibility in Asia and Africa, would that be worth it? But like you said, I'd say that's very unlikely. And yeah, I'd agree with you. Like the point uh I made earlier about, yeah, on the influencer side of things, I think that's the change in strategy we're going to see, like what you said. Once the, as and when the, you know, this is still a consultation. This isn't even concrete, but as and when the premier league was to be cut off as a source of marketing for them, then yeah, the, the change of approach would shift to, uh, yeah, social media and influencers or as you pointed out, uh, very correctly looking over European leagues where there's a, where there's a, where there's a loophole. that Ted, like the value of the premier league and it, you know, we're not even talking about necessarily the, the big. The big, call them the big six Tottenham are about to get relegated. They're not really the big six anymore are they? you know, the clubs, um, the value of the premier league in Asia is massive compared to even the other leagues. Um, is the most watched league there. Um, and that's across Asia as well across Southeast Asia too. Um, millions of fans, you know, that's, that's why this is so valuable. So it would really be hard to replicate that in. in other leagues, think, unless you are going for, you know, one of the big European teams, I guess. If you're a Spurs fan, make sure to leave a Joe, uh, hello message on your preferred podcasting platform. Uh, but I guess we'll have to hashtag wait and see what happens with this measure should it go forward. But we've talked operators, we've talked, um, the government, we haven't talked about the football clubs. Are they facing a structural reset in how they monetize sponsorship and venture previously filled by gambling brands? We, of course, mentioned the side of pitch, the sleeve sponsorships, but how does this impact the clubs? Does it have a bigger impact on the mid table, lower league clubs compared to the Premier League giants like the big six, five? I don't know. But what's the impact on clubs? Well, you know, I'd say there's both a yes and a no answer to this question. Yes, the clubs that have partnerships with the unlicensed brands will need to, well, obviously in the event that these partnerships are banned, we'll need to think of who to go for next. you know, overall, the other thing to look at this sense is that if they still want that commercial link with the betting industry, the regulated industry is there and is still more than keen to work with them. Unless the taxes we're getting in April do butch your marketing budgets as much as we're expecting. you know, even after the front of shirts ban comes in, you can still have the option of having a uh betting sponsor on your sleeve will be up for paying money for that or in the perimeter advertising or as a social media partner or whatever, as long as they're regulated. So if you lose your unlicensed sponsor, then I guess the main bit of advice you could have would be get a licensed one. Yeah, I think, um, and I know we're into kind of extra time on this podcast. are truly running, running over time, but, m I'm glad you asked this folks. I think it's an important kind of caveat to the discussion. Um, and, uh, Ted is, he might be speaking a little bit biased because, uh, to break the fourth wall, he is a forest fan and, uh, they have a very rich Greek owner. So he, doesn't know about the financial hardships of football clubs right now. They just keep digging in and hiring. Oh, the Manchester United fan knows all about the financial hardships. They've had about eight managers this season, right? em But I think it's important because as Ted mentioned, this isn't an isolated regulation. comes amidst uh changes to the front of shirt sponsor. It comes amidst tax hikes for the betting industry, which are inevitably going to impact marketing budgets. Um, and we've, seen changes to kind of, yeah, football economics are interesting at the moment. Financial fair play is impacting a lot of clubs. It's limiting how they work. Uh, the commercial revenue of clubs is so crucial. see, uh, Villa's financial results, uh, this, this week. They're in, they're in a real tough time. They're really limited and that's Villa who are, you know, batting way higher than they should be. They're in the champions league. Uh, so really tough that a lot of emphasis is going to be on them to make sure they finish in the top five and continue to get the champions league. also have to go to, uh, and Ted will appreciate me saying this as a, as a forest fan as well. look at Lester who are languishing once premier league champions. They're now languishing at the bottom of, um, the championship, uh, you know, hit with a six point deduction this year. Um, they did once have a partner that wasn't licensed in the UK as well. That's a whole nother story, but they've been crippled by financial fair play and that could see them in league one next season, which is quite crazy. uh could just also say, Joe, the other club you mentioned, Aston Villa, who even though they might be having a financially tough time, they do also have a betting partner, but with them it is fully licensed UK sports bug, Batano, isn't it? I just think that's an interesting contrast there with the two clubs you've chosen. em to name, but yeah, you're not wrong at all. The financial situation for UK clubs has been very difficult for some time and it explains why these partnerships, whether with an unlicensed firm or a licensed firm, are so valuable to a lot of these clubs. And yeah, and the adjustment will be difficult. But I think, just to go back to my original point, the regulated industry is obviously still there as a willing marketing participant. There's going to be cutbacks from the regulated industry, right? In terms of sponsorship, not just on the front of shirt that isn't going to be allowed anymore, but also because of the tax hikes, we could well see sponsorship limited compared to what it has been. So yeah, who knows who's going to fill that gap? Crypto exchanges. Crypto exchanges. Well, I think uh we have done a great job on this extra time. Definitely better than Juventus did against Galatasaray. Unfortunately, we have run out of time on this podcast, but thank you very much, Ted and Joe for covering this story. It's a developing story as well because it's only a consultation, so it will definitely be more news to come. So make sure you are subscribed to SBC News, iGaming Expert and all SBC media news outlets out there. You can keep up to date also follow iGamingDaily on all social media and your preferred podcasting platform. Of course, TikTok as well. You can watch our social snippets. So if you don't want to see, you know, you don't want to listen to Joe and Ted talk about your football clubs like they do, um then you can just watch the snippet on TikTok. that has been all for today. Thank you very much, Lady McDonald for producing this episode. I'm Fernando Nott and to our listeners out there, we'll see you in the next one.