Will a new tax and junk food cover Oz gambling ad ban shortfall for broadcasters?

It goes as far as to suggest that a gambling ad ban would clear the way for other industries to advertise, citing junk food, banks and fossil fuel companies.

The Australian Institute claims a 2% levy on operator revenue would not only replace advertising income lost through a gambling ad ban, but also cover budget shortfalls at the Australian Broadcasting Corporation (ABC).

The proposal aims to address the government’s concern that a ban on gambling advertising would harm free-to-air broadcasters.

MPs such as Bill Shorten have taken to the airwaves warning broadcasters are “under attack” from social networks such as Facebook, with revenue and audiences declining. To take away a key revenue stream would potentially fatally undermine these media companies, Shorten said.

How a levy would mitigate a gambling ad ban

Gambling revenue totalled AU$17.2bn (£8.9bn/€10.4bn/$11.5bn) in the 2022-23 fiscal year according to the Australian Bureau of Statistics, the thinktank explains. 

Operators invested $238.6m on free-to-air TV, metro radio and online (including social media) between May 2022 and April 2023, figures from the Australian Media and Communications Authority (ACMA) show.

Therefore a levy of 1.4% would cover the gambling advertising shortfall for broadcasters, the Australian Institute says. A 2% levy would raise $344m, shoring up the ABC’s budgets. 

“For the government, even without the levy, giving money to the free-to-air networks and banning the ads would be a small cost compared to the costs that gambling imposes on society,” the Institute adds.

“For the media, it’s far better than a win-win.”

Will junk food, banks and fossil fuels fill the gambling ad gap?

It believes broadcasters would generate additional revenue by selling the slots to other industries “producing a revenue bonanza”.

“One of the myths perpetrated by gambling interests is that banning their advertisements would cost the free-to-air networks hundreds of billions of dollars. Not so.

“The reality is that other advertisers would buy the slots vacated by the gamblers. The same is true for the sponsorships of community and professional sporting clubs across the country.”

Other advertisers may not pay as much, the thinktank concedes. “But there are still lots of companies with sullied reputations who would be willing to spend plenty.

“Junk food companies already do so. Banks and fossil fuel companies are the next in line.”

The Institute does not make any comment on the ethical concerns associated with allowing these industries to advertise. 

Instead, it talks up ways the additional revenue could support more niche sports and fund more Australian content. 

“But these are fine details, with almost as many permutations as the ‘multis’ so heavily promoted on the screens and airwaves now.

“The main thing is that, for everyone but the gambling interests, this is a winning bet.”

“Murphy’s law” proposes Australian gambling ad ban

This threat to broadcasters is the main justification given for the government’s rumoured plans to water down the recommendations of the late MP Peta Murphy. 

Murphy’s law sets out restrictions on gambling advertising, including a total ban on TV and radio ads, as well as a total ban on online ads.

Instead the government is likely to limit gambling ads to two per hour until 10pm each day, prompting a fierce response from reform campaigners. 

The Alliance for Gambling Reform (AGR) has joined activist share-trading platform SIX to buy stakes in Nine Entertainment and Seven West Media, to put pressure on each network to drop gambling ads. This follows a letter coordinated by the group and signed by former prime ministers Malcolm Turnbull and John Howard to convince the government to change course.