The pros and cons of betting sponsorship in football
By Rupert Pratt | July 21, 2017
With The FA recently pulling its £4m ($5.2m) partnership with Ladbrokes, the relationship between betting companies and football has come under close scrutiny.
From a commercial perspective, betting represents good income with related companies making up nine out of 20 Premier League club shirt sponsors – while a large percentage of the clubs have a betting partnership of some sort – but what are the pros and cons for the sport?
With football being the number one sport for betting companies, sponsorship is simply one of the most effective ways for gaming companies of reaching their primary target audience. But does the dominance and depth of betting sponsorship, endorsement and advertising pose a risk to a younger generation who can’t help but be exposed and influenced?
What does the industry think? I canvassed the opinion of the sports industry to understand more.
James McAndrew: “Not only are nine of 20 teams sponsored by betting companies, each advert break in games is littered with betting ads – not to mention being supported by a host of ex-players and celebrities. The number of children being exposed to this casual betting culture is also very worrying and teaching from a young age that betting is part of our culture and supported by their favourite footballers.”
Andrew Starmer: “There will come a time when the links between betting and live sports are cut. I appreciate gambling has been a part of sport and competition for hundreds of years and it is by its nature competition itself. I just think we have gone too far with how advertised and linked it is, to football especially.”
But for many mid-tier clubs and rights holders with less on pitch performance guarantees and broader fan bases it represents very necessary income. However, does this over reliance on ‘easy money’ force clubs into shorter term ‘cash-upfront’ thinking?
Ben Well argues that with an ever ageing fanbase football risks alienating the next generation of fans “instead of partnering with brands who are not just relevant and value-adding, but also actually legally-permitted to communicate with younger fans.”
Or is it simply a case of very measurable ROI? And therefore, good business for both club and sponsor, with the betting company being able to get a good return on its investment and happy to pay more than others might.
Phillip Polack argues: “Ideally sponsorships should be measurable and deliver tangible ROI. Betting companies can achieve this in real time via sport.”
Philip Canavan supports this: “Regardless of any opinion, betting is a legal, regulated and hugely popular part of sports for the fans; and for the vast majority of UK licensed bookmakers football is the most popular sport to bet on. It cannot be a surprise to anyone that the brands ‘fish where the fish are’ when it comes to marketing spends.”
And do the clubs have much choice?
Alex Wortley: “Other companies have been priced out of the shirt sponsorship market. This leads to attracting those with disposable marketing budgets and, as mentioned, those who can clearly measure ROI from their sponsorship.”
Malcolm Baker: “Clubs will take the highest bidder in terms of sponsorship. This is Asian bookies at present for the majority and, as others have said, a question of making hay while the sun shines for the clubs.
“It’s also important to realise that every game is shown live elsewhere in the world and with the highest populations in the Far East it is probably better valued than TV advertising itself. I am surprised that more multinational firms do not advertise, such as Coca Cola or Nestle, but I assume ROI is not sufficient or because it’s not product led?”
Let’s not forget the commercial pressure these clubs are under to monetize their assets. Especially the mid to lower tier clubs who don’t have the luxury of not having to hedge against relegation (or promotion) and are therefore forced into short-term deals and last minute sales pushes and negotiations, subject to what position in the league they might be in.
Uncertainty is great for sport (its biggest asset) but for not the commercial directors. And from a moral perspective is it any more or less culpable as alcohol, fast food and soft drinks?
Sports lawyers Carl Rohsler and Else Haj Houssain argue: “Our society has decided that gambling is ‘morally neutral,’ (to use the words of the Government’s White Paper before the Gambling Act). In other words, our society accepts the social harm and risk caused by gambling as a cost worth paying in order for the majority to have the freedom to gamble.
“This is a very similar social balancing act that we face in relation to the wide availability of alcohol, which has its own issues related to health, adult behaviour and social cost.”
Football is also highly regulated with – as Honor Hancock points out – quite a few regulatory limitations in place regarding youth replica shirts & teams along with no betting advertising before the watershed.
What about other sports and the impact on income if betting companies pulled out?
Rohsler and Houssain point out that other sports such as horse racing have explicitly acknowledged that, but for the gambling industry, they would cease to exist. The betting levy demonstrates clearly that not all governing bodies fear that their integrity will be compromised simply because gambling operators pay large amounts of money to fund them.
So what’s next? Is the FA’s decision a watershed moment for the industry, the start of the end?
Rohsler and Houssain make a very valid and interesting point: “The FA is of course entitled to make and terminate its commercial arrangements as it sees fit. But it seems to me that its decision is regrettable because it demonstrates a lack of intellectual clarity about the gambling industry.
“By cutting its links, the FA has implicitly suggested that there is something inappropriate in there being commercial links between the sports and gambling industries, and it has effectively accepted what Joey Barton said was a ‘huge clash between [the FA’s] rules and the culture that surrounds the modern game.’ In fact, integrity, social responsibility and commercial funding are not being at odds with each other, save where they are wrongly co-mingled on the back pages of the popular press.”
— Everton (@Everton) May 15, 2017
You could argue that betting companies will and are reaching sports fans via other means such as advertising, online publications and social media and at least the money is going back into the sport. By paying the FA £4m ($5.2m), Ladbrokes was at least contributing to the governance of the sport and sector, as well as the growth of the game.
Let’s not forget that for the vast majority of fans, placing a bet is simply a great way of enhancing their enjoyment of sport.
Betting needs to continue to be managed responsibly and what better way to manage this than from within, on sport and its stakeholder’s terms?
Surely, this is better than having no control nor any benefit.