Regular readers (a small but loyal bunch) will recall I recently blogged on the potential consequences of the Gambling (Licensing and Advertising) Act 2014 – and the ‘point of consumption’ regulatory regime it introduces – for sports integrity and sponsorship.
One of the issues I raised was that the provisions in the Act restricting the advertising of unlicensed gambling created uncertainty around sports sponsorship – in particular sponsorship by unlicensed overseas gambling operators who were not UK-facing. An example cited was that of a Premiership football club being sponsored by an Asian gambling operator who was seeking to raise its profile in markets other than the UK.
In support of the Act coming into force on 1 November, the Gambling Commission has issued a letter to sports governing bodies outlining its interpretation of the Act and the risks sports bodies and associated clubs run if they are sponsored by unlicensed overseas gambling operators who are not aiming their products at UK consumers. (For those interested, the Gambling Commission publishes a list of licensed operators here).
Risk areas
The letter makes for interesting reading. In essence the Gambling Commission’s position is that such sponsorship presents two problems:
• First, advertising of unlicensed overseas operators (i.e. via shirt branding) who are not selling into the UK market may constitute an offence of unlawful advertising unless UK consumers have been blocked from accessing the operator’s products and have been made aware in the advertising that the operator’s products are not available to them.
• Second, advertising of unlicensed operators undermines efforts to combat betting-related match-fixing since only licensed operators are bound by requirements to report suspicious betting activity to the Gambling Commission and sports governing bodies.
Unlawful advertising
On the first point, the eagle-eyed among you might be asking the following questions with regard to the offence of unlawful advertising:
• How can an unlicensed overseas operator demonstrate it has successfully blocked UK consumers from accessing its products? (Or, put another way, how will the Gambling Commission know it hasn’t?) and;
• How should sponsorship be presented (e.g. on shirts, advertising hoardings, websites etc.) so as to make UK consumers aware that the products being advertised are not available to them?
Perhaps somewhat worryingly for sports bodies and clubs, the Commission’s letter does not provide guidance on these questions other than to note that blocking technology is not always 100% effective and to advise that relevant sports bodies and their clubs ‘will no doubt wish to ensure that they have minimised their exposure to this risk’.
In part the difficulty for the Commission in articulating more detailed guidance is the drafting of s330 of the 2005 Gambling Act which implies that, for an offence of unlawful advertising to be committed, it must be demonstrated that the unlawful (i.e. unlicensed) gambling took place as advertised. Proving this – and in so doing answering the questions above – presents something of a regulatory headache and in practice will most likely be a matter for the courts.
Importantly this is not an issue confined simply to clubs. Governing bodies and competition organisers across a diverse range of sports have sponsorship arrangements with gambling companies: in football the FA counted William Hill as an official supporter (until the end of the 2014 World Cup) while in darts the PDC has a range of gambling sponsors for each of its events. The new rules on gambling advertising apply to these sports bodies just as they do to clubs.
Protecting integrity
Turning to the second point – the impact on integrity – the message from the Commission is perhaps more subtle, seeking as it does a recognition of the trade-off between protecting sporting integrity and maximising commercial sponsorship opportunities.
It also reflects the fact that the Commission’s primary role is to regulate gambling operators and protect consumers; it does not have direct regulatory leverage over sports bodies or their clubs and in this context it can do no more than remind sport of its responsibility to send the right message on integrity.
The difficulty in practice will be the extent to which sports governing bodies – who bear overall responsibility for integrity in their respective sports – can influence the commercial decisions made by individual clubs and/or competition organisers who will understandably seek to extract the best value from sponsorship opportunities.
This presents a potentially significant challenge for sports governing bodies although, as the Commission’s letter makes clear, they do at least have an opportunity to lead from the front by entering into sponsorship arrangements with licensed operators who have made commitments to safeguard integrity and to abide by the rules on information sharing.
As I made clear in my previous blog on this issue, the regulatory reforms that have been introduced in the UK gambling market are quite radical and will take time to bed in. As a result there may well be teething troubles along the way as all parties – regulators, clubs and sports governing bodies – adapt to the new (and hopefully improved) environment.
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