Dec. 8 2006, Online gambling companies were delivered another hammer blow today as it emerged they could be stopped from advertising on football shirts.
The Gambling Commission is concerned such ads might encourage children to bet, especially when they appear on youngsters' replica kits. Big club shirt sponsorships by gaming companies currently include Tottenham Hotspur, Aston Villa, Blackburn Rovers and Middlesbrough.
Internet betting businesses are already reeling from the ban on their activities in the US, which has forced a number to sell the bulk of their operations and has crippled their business models.
Fears are now rising that they could become a pariah of sports advertising like the tobacco companies, facing bans across the world. That would make it increasingly difficult for them to market themselves in Europe and Asia, where they have now been forced to focus their activities.
Negative publicity about the impact on children of online gaming adverts could also have a knock-on effect on replica shirt sales this Christmas -- traditionally a major time of year for sales at Tesco, JJB Sports and others.
Some clubs appear to have seen the row coming. Manchester United pulled out of shirt sponsorship talks with Gibraltar-based betting group Mansion after becoming unhappy with the association with gambling. In May, Mansion signed up Spurs instead, in a 34 million deal. The club insisted the company could only use the word "Mansion" and the logo, rather than the website addresses of its gambling sites.
It is not clear whether such agreements would be enough to satisfy a critical Gambling Commission investigation, however, as simply typing "Mansion" and "gaming" into Google takes viewers directly to the casino.
888 sponsors Middlesbrough's shirts but is in the final year of that deal, 32Red backs Aston Villa, and Bet24 is emblazoned on the chests of Blackburn Rovers and Leeds United.
Marketing analysts said that, while the likes of Manchester United and Chelsea could afford to be choosy, the loss of a major category of sponsorship to the game would hit hard on smaller clubs.
The sudden arrival on the scene of online gaming companies with huge advertising budgets has helped fuel a 25 percent increase in spending on shirt sponsorship deals in Premiership football in the last season alone, with the amount now totalling 70 million.
In a speech to the House of Commons last night, Sports Minister Richard Caborne said: "This issue needs to be looked at and I'm pleased that the Gambling Commission will be consulting on this in the New Year."
The new legislation on gambling does not come into effect until next September and the Gambling Commission is drawing up regulations on a host of issues.
New gambling rules put shirt deals at risk
Friday December 8, 2006
Government concerned by targeting of young fans Premiership clubs 'could be breaking the law' . Premiership clubs could be forced to terminate lucrative sponsorship deals with gaming companies after the government announced it is to examine whether shirt sponsorships and other endorsements involving gambling operators are illegal.
Tottenham Hotspur, Middlesbrough, Blackburn and Aston Villa have all recently signed shirt sponsorships with online gaming companies, prompting concern among MPs and other interest groups that the deals effectively bypass laws intended to protect children.
Under current law it is illegal for gambling operators to target children with advertising and under the new Gambling Act, set to become law next September, the penalties for doing so will be increased. The position regarding sponsorship is less clear, however, with some legal opinion suggesting shirt deals with gambling companies break the law. These deals have attracted particular attention because of the popularity of replica shirts among children.The Premier League is aware of the government's concerns and is already considering submissions on behalf of its member clubs. One concession under consideration is removing the sponsor's name from under-16s' shirts.
The government shares concerns that these sponsorships could be viewed as circumventing the legislation and last night announced that the Gambling Commission will begin a consultation process on the issue in the new year.
The sports minister, Richard Caborn, who also has responsibility for seeing through the Gambling Act, told the House of Commons last night that he was concerned about gaming companies using football to reach children: "There are some concerns about the use of sponsorship in sport and football clubs in particular and the Gambling Commission will be consulting on this issue in the New Year with my full support."
The Gambling Commission, which will enforce the new act on the government's behalf, will canvass opinion across the gambling and football industries before reaching a decision on whether sponsorships can continue. Government sources said the Gambling Commission had the power to rule that they are illegal.
The government's announcement will set alarm bells ringing within football, where the new wealth of online gambling companies has provided a welcome boost to the sponsorship market.
The explosion of interest from gambling companies has led clubs to take legal advice, with one leading solicitor describing it as the biggest growth area in sport law. The solicitor, speaking before the government's announcement, said that the current ambiguous status of sponsorship made it hard for clubs to make definitive judgments: "According to the letter of the law it is perfectly possible to see that all these clubs are breaking the law."
Companies such as 888.com (Middlesbrough), Bet24.com (Blackburn), 32Red (Aston Villa) and Mansion (Tottenham) have all secured shirt deals in the last two seasons. The deals have sent inflated sums flooding into these middle-ranking clubs. Mansion's deal with Spurs, signed at the start of this season, is worth around £34m over four years, a considerable increase on industry estimates of the club's sponsorship value before the gaming boom.
When 32Red signed its deal with Aston Villa at the start of the season the company's chief executive, Ed Ware, was unambiguous about the point of the deal: "Everyone at 32Red Plc is very proud and excited that millions of people throughout the World will now see the 32Red.com website address every time they tune in to see Aston Villa play in the Premiership."
Manchester Utd: AIG (insurance)
Chelsea: Samsung mobile (electronics)
Arsenal: Fly Emirates (airline)
Portsmouth: OKI (business printing)
Liverpool: Carlsberg (brewing)
Reading: Kyocera (electronics)
Everton: Chang (brewing)
Aston Villa: 32 Red (online gambling)
Bolton: Reebok (sportswear)
Tottenham: Mansion (online gambling)
Wigan: JJB (sportswear retail)
Manchester City: Thomas Cook (travel)
Fulham: Pipex (ISP)
Blackburn: Bet24 (online gambling)
Newcastle: Northern Rock (banking)
Middlesbrough: 888.com (online gambling)
Sheffield Utd: Capital One (car finance)
West Ham: Jobserve (online recruitment)
Charlton: Llanera (Spanish property)
Watford: loans.co.uk (online finance)