UK looking to ban betting sponsorship in its football

Football teams sponsored by betting firms could soon become a thing of the past, but it won’t come without its challenges.

What is going on?

According to reports emerging from the UK, the government-led review of the Gambling Act 2005, which has been underway since December last year, is due to complete soon. Its conclusions are expected to massively reduce – if not completely eradicate – sponsorship deals of football clubs with betting companies throughout the island nation.

Why is it happening?

For decades, sports betting held a crucial place among the British people, but with widespread unregulated and unsupervised betting, gambling addiction quickly established itself as one of the biggest epidemics in the UK, with the number of people falling prey to it in millions, and many resorting to crime and ending in financial and/or psychological ruin.

The Gambling Act 2005 came into being in order to bring the UK’s gambling laws into the age of Internet and increase regulation of betting firms while protecting the young and vulnerable from its worst aspects.

Since then, betting companies have maintained a workable relationship with football, often promoting themselves as “responsible” brands by putting disclaimers of responsible use of their products in their advertisements and offering financial and educational contributions towards the fight against gambling addiction in the UK.

However, the widespread advertising of these companies has remained an irksome and sensitive matter, with people likely to have either suffered themselves from gambling addiction or known someone close who did.

Another problem that has arisen over the past decade is the emergence of “white label” firms. These companies hold a gambling licence to operate in the UK but have themselves based in regions with laxer jurisdiction and tax laws (like the Isle of Man, Malta and Gibraltar). They then rent their licence out to foreign operators who leverage it to advertise themselves across the UK’s football clubs and their assets, earning themselves a massive viewership worldwide. Via football shirts, pitchside hoardings, and digital branding, these companies target not just the people in the UK, but also that of the other countries, in many of which gambling and its advertising remain illegal.

The “white label” operations have been crucial in the British people deeming the 2005 Gambling Act outdated. Hence, in December of last year, the UK government began the review of its gambling laws.

In Italy, betting sponsorship has been banned since 2019. In LaLiga, the Spanish topflight of football, betting sponsors have been banned since the start of the 2021-22 season. The UK government feels that while its current review may not result in a complete removal of betting sponsorship from its game, it may at least be a start towards it, with front-of-matchday-shirt sponsorships expected to get an outright ban.

What challenges could it give rise to?

While there is a veritable moral argument for betting sponsorship to be removed from football, the financial contribution bookmakers make to British football cannot be ignored or even taken lightly.

Nine of out twenty Premier League teams have shirt-sponsorship deals with betting companies. Six football clubs have such deals in the division below. The entirety of English football’s second (the Championship), third (the League One) and fourth tiers (the League Two), collectively called the Football League, is sponsored by SkyBet.

Mid-to-lower-table Premier League clubs rely on these multi-million-pound deals with foreign bookmakers to try and keep up with the “Big Six” (Manchester United, Arsenal, Chelsea, Liverpool, Manchester City, Tottenham Hotspur), who don’t necessarily need to tie up with these firms because of their global commercial might. For clubs in the Football League, betting sponsorship brings in some much-needed financial support; a worrying amount of Football League clubs remain either on the brink of collapse, or prone to the same if money were to decrease even slightly. This situation has been worsened by the COVID-19 pandemic.

With cases so dire, and clubs desperate to make up for the ever-worsening financial disparity, betting sponsorships are hard to eliminate overnight without proper thought given towards how to make up for the outgoing money, with it being crucial for many clubs to just stay afloat.

Another challenge eliminating betting sponsorship brings is the emergence of newer companies offering products of similar – if not exponentially larger – financial risks. Many football clubs have already started jumping ship, moving on to sponsorship deals with cryptocurrency-based platforms and contract for difference (CFD) brokers.

It is not coincidental for crypto-based companies and investment brokers to have increasingly become mainstream just as betting companies are about to be run out of town. Football clubs, just like any other organisation, need to look after their own well-being, so they’re trying to equip themselves as best as they can to face the seemingly inevitable eventuality that is the ban of betting sponsors.

Most crypto-based platforms offer non-fungible tokens (NFTs) in the form of unique digital assets (trading cards, artwork, fan tokens) which can be acquired for a price, which is subject to change and can hence be sold for profit. In case of CFDs, the profit/loss is predicated on the forecast one makes regarding the change in the value of an asset (share, forex) over a pre-agreed period. In both of these cases, the prospect of monetary loss is governed by factors much more intricate than the ones a betting slip entails, leaving the door open for sponsors bringing financial troubles long after the betting companies’ exit.

Also Read – Cryptocurrency deals in football

When could it happen?

With the review nearing its conclusion, realistically, the earliest we could see the betting sponsors bid adieu to football shirts will be the 2022-23 season, but with football clubs in need of finding a replacement to fill the ensuing financial void, the ban on betting sponsorship is very likely to not be enforced before 2023.