The threat of further advertising restrictions is weighing heavily on the industry, according to speakers on various panels at the second day of ICE VOX 2019.
A number of sessions saw regulators and industry representatives express concerns over the future direction of advertising, not just in Europe, but also in Australia and the US.
Many agreed that regulatory crackdowns seemed to be gaining momentum and spreading, often without warning. In one session, Sarah MacDonald of law firm Wiggin pointed out that government action was especially difficult to predict: “The Italy ban is so stark and came out of nowhere.”
She said it was possible the UK could suffer a similar fate, predicting that a change in government could lead to concerted action to limit operators' advertising.
However it wasn't just government pressure that could harm the sector – poor public perception is fuelling support for new restrictions. The Advertising Standards Authority’s Andrew Taylor said that despite the industry’s impending voluntary whistle-to-whistle ban in the UK, there remains a “significant call for an outright ban on gambling advertising in the UK”.
The Australian Communications and Media Authority’s Jeanette Knowler added that Down Under, where a ban on advertising during sports games came into force last year, there were calls for the government to go even further.
Taylor said that the “groundswell” of public opinion being led by campaign groups and charities meant there was a real danger of intervention by the UK’s current government. “The government might not be doing anything now but the potential is there for them to do something if they find it necessary.”
Looking at the evidence
However, Taylor said that much of the criticism about advertising was not based on evidence. He cited the ASA’s report published last week, which revealed that on average children see 2.8 gambling ads per week – “not a massive number” in his opinion.
He added the ASA’s findings went “against the narrative that children are being bombarded with gambling ads”.
When asked by a delegate if the regulator had looked into children’s exposure to online advertising, he responded by saying it was awaiting the results of a large-scale research project into the topic being undertaken by GambleAware.
He added, however, that any actions taken by the ASA would be based on evidence rather than public opinion.
And though the exposure of children to advertising was a hot topic, it is actually misleading advertising that the ASA sees as a bigger concern at present.
“You offer something that says free but there is a catch – it is not free, is it? We see too much of that,” said Taylor
The idea that perhaps too much focus has been placed on the danger of children being exposed to gambling advertising was picked up on during a later panel exploring whether or not mass marketing was the only way to enter new markets.
MGM’s Alan Feldman argued there was a double standard in the US, citing the example of the proliferation of alcohol advertising during the recent Super Bowl.
He said if society is to assume that’s acceptable because parents will educate their children about alcohol and prevent them from accessing it, he couldn’t see why the same would not apply to gambling.
He added that governments tend to overreach when it comes to regulating advertising and can end up undermining the efforts of those operators operating in the markets they have legalised.
But while Feldman favoured a self-regulated approach, fellow panellist David Schollenberger of the Cyprus Gaming Commission disagreed. He said the proliferation of sports betting advertising in the UK was a good example.
“Left alone without regulation sometimes operators can be overzealous in getting their products out,” he said.
Schollenberger, who put himself in the ‘against’ camp once the speakers and audience were asked to split into ‘for’ and ‘against’ mass marketing, argued that direct marketing was a safer approach. “If you are direct marketing to your loyal group then you know they don’t have problems and it is less dangerous than marketing to people who might have problems.”
However, several audience members pointed out direct marketing was not effective as an operator’s first foray into a new market. Indeed, panellist Naveen Goyal, of Khel Group, said mass marketing was the only way the online skill gaming operator could enter the crowded Indian marketplace and that he believed it was responsible for 40-50% of its revenues. “In our view that is the only way you can penetrate to a large audience.”
Mass marketing key to market entry
New Jersey Division of Gaming Enforcement’s Louis Rogacki said he was also in favour of mass marketing being allowed, as it was the only way consumers could differentiate between legal and illegal operators in the early stages of a market.
A number of audience members pointed out that new brands had to engage in mass marketing to build trust.
This echoed comments made in an earlier panel on sports sponsorship by Robert Davidman of Fearless Agency, who said this was the reason European operators were sponsoring US sports teams.
“In New Jersey you have a handful of operators that are legally operating sports betting operations in-state right now but these operators most people don’t know,” he said. “They don’t know who 888 is. They don’t know who PartyPoker is or GVC.”
He said Americans were reluctant to give all their personal information to unknown companies, and that 888’s partnership with the New York Jets had been aimed at “building trust”.
He added that Asian clubs sponsored UK football clubs for similar reasons, and said that the possibility that some other organisations and clubs would begin to take the same position as the FA and shun gambling sponsorships would have negative repercussions.
“When they take this revenue away from the clubs, it takes away from the fans because the fans then have to pay more for tickets. They have to pay more for things within the stadium. Why? Because they have to make up for the lost revenue that they are not getting from the sponsors. Sponsors help defray the cost of the entertainment that we are providing to the fans. That is a big thing that is not seen by these governing bodies. They are not looking at the trickle-down effect of where the revenues actually go and how they help the consumer.”
While this may be true, Wiggin’s MacDonald said that some organisations simply didn’t want to be associated with such a problematic industry.
Advertising, it seems, is yet another area where the industry's negative reputation is curtailing its opportunities and if the comments from participants on day two's panels are anything to go by, things might get worse before they get better.