New UK advertising guidelines will mean "significant source of income will disappear”

17 April 2014

The new advertising regulations that are due to come in as part of the UK Gambling Bill will have a significant impact on football and sports clubs that have become heavily reliant on sponsorship income from Asian operators in the last few years, according to David Zeffman, Partner  at London law firm Olswang.

In a column recently published on iGamingBusiness.com, David Zeffman writes that “with at least 15 of the 20 English Premier League football clubs sponsored by Asian gambling companies, the Gambling Commission's approach to implementing the Gambling (Licensing and Advertising) Bill ("the Bill") will inevitably mean that this significant source of income will disappear”.

The operators concerned will have to be licensed in the UK once the Bill is live to be able to advertise at Premier League and other UK sports venues, which “will entail a significantly increased burden for the Asian operators in terms of regulatory compliance”, adds Zeffman.

Operators will be required to give details of each territory from which they obtain more than 3% of their income and the reasons why they think they are entitled to take bets from those territories.

The reason for the operators’ sponsorship is primarily to target Asian customers and they would likely be happy to block UK customers if that meant they could continue to sponsor UK clubs. However, the Commission will not issue “advertising only” licences.

It told iGaming Business that it “will not normally licence operators unless they have a GB-facing business and either currently transact with GB consumers or have a clear plan for doing so in the future.  We note that the current law on non-remote gambling advertising has not been amended and does not provide the defence that remote gambling operators might be able to rest on. But whatever the position, we do not think it is right to give a Gambling Commission licence for betting to an operator that is not part of the player protection and sport integrity framework in Britain.”

Many of these Asian operators are licensed on the Isle of Man. Asked how this might affect their operations on the island, Peter Greenhill, chief executive eGaming at the Isle of Man Department of Economic Development, said: “A number of the Asian-facing operators on the Isle of Man were prepared to geo-block UK resident players because the real target for their substantial investment in UK sport was to advertise to their rest of world potential markets. This investment is vital to a number of clubs especially those outside the top few brands in the Premier League.

"There are other alternatives and each company will be making their own decision as whether the time, effort and reporting requirements of obtaining and maintaining a new UK license are cost effective. New technology advances in green screen perimeter boards may allow the Isle of Man licensees to reach their target market without incurring these additional costs."

Greenhill aded that the overall effect of Point of Consumption on the island's igaming sector would “be comparatively less than elsewhere due to the fact that, despite each Isle of Man licence having a different operating strategy and very different player profiles geographically, the vast majority of players addressed by Isle of Man operators reside outside the UK”.

Related articles: House of Lords gives final approval to new UK gambling bill

Gambling Commission approach will eliminate Asian sport sponsorship income

FAQs: Implementing the Gambling (Licensing and Advertising) Bill