Is TV Advertising Still Viable for iGaming Brands?

Posted by Harry Kane on Thursday, January 21, 2021

Think carefully; when was the last time you saw an online casino advert on television?

The truth is that you’re increasingly unlikely to see sponsored iGaming messages on television in the UK, particularly prior to the 9pm watershed.

While sports betting adverts are slightly more commonplace, there’s no doubt that brands are less inclined than ever before to promote themselves through this medium in the digital age.

We’ll explore the potential reasons for this below, while asking whether not television advertising remains a viable option for iGaming operators nationwide?

The Rise of Regulatory Oversight

Although television has never been the dominant advertising medium for iGaming brands (we’ll have a little more on this later), it became an increasingly accessible and popular option for operators in the wake of deregulation and the Gaming Act of 2005.

However, the tide began to turn towards the end of 2017, when the UK Gambling Commission (UKGC) announced its core strategic objectives through 2021. Central to these objectives was the desire to adequately safeguard vulnerable players, while the regulator also pledged to enhance the reputation of the industry and its perception amongst consumers.

They’ve sought to achieve this goal by creating an increasingly stringent regulatory climate, while simultaneously imposing significant financial penalties for operators that failed to comply with new safeguarding and anti-money laundering rules.

At the same time, the regulator began to focus on different segments within the market, with the impact of advertising and gambling sponsorships coming under some serious scrutiny. In fact, the promotion of gambling brands come under fire after the rollout of the controversial FOBT cap, which slashed the maximum bet for fixed-odds betting terminals from £100 to just £2.

At this stage, the Betting and Gaming Council (BGC) perhaps sensed that either the UKGC or the government would intervene on television advertising (and potentially alternative marketing activities) for gambling brands, potentially by implementing a widespread ban that would remain in place indefinitely.

So, the BGC took the proactive step of implementing a voluntary ban on TV advertising from the summer of 2019, with including a series of measures that enabled operators to ward of increased regulation and assume control of their own destiny.

More specifically, the proposal was based around a so-called “whistle-to-whistle” ban during all pre-watershed live sporting broadcasts, meaning that live games and matchups aired prior to 9pm would be completely from sponsored messaging.

The voluntary agreement also included a temporary end to betting adverts aired around subsequent highlight shows and re-runs, while bookmakers and brands would no longer be permitted to sponsor pre-watershed broadcasts for the foreseeable future.

Of course, subsequent events meant that this voluntary ban was temporarily extended to include all activity on television in March 2020, but at the time there’s no doubt that the measures were welcomed by the regulator and potentially deterred the government from acting in the same way that they did after reviewing FOBT usage nationwide.

However, it appears as though brands are struggling to resist the creep of regulatory oversight, both from the perspective of the Gambling Commission, governmental agencies and cross-party initiatives in Parliament.

Most recently, it was announced by The Committees of Advertising Practice (which has been established to help create the UK code for advertising campaigns and activity) that the use of celebrities to help promote gambling brands on television was likely to be prohibited in the coming months.

This measure will be unveiled as part of new rules that aim to prevent operators from aggressively targeting young and potential vulnerable gamblers, particularly that may be below the legal gambling age of 18.

This would undoubtedly have a significant impact on the current advertising campaigns being ran by operators in the UK, the most effective of which feature prominent sports personalities such as Michael Owen, Harry Redknapp and even current Tottenham manager Jose Mourinho.

This move represents a subtle but significant switch in the rules, which currently stipulate that an advert of this type will only be banned if it’s deemed to be more likely to appeal to children (regardless of how it may be viewed by adults).

Beyond this scheduled crackdown, it has also been widely reported that the All-Party Parliamentary Group (APPG) for gambling related harm has proposed a total and permanent ban on TV advertising in the UK, as part of more sweeping changes that are aimed at protecting vulnerable and underage players throughout the UK.

This blanket ban would prevent online casinos and sportsbooks from advertising at all on television, either pre- or post-watershed. This would include both live broadcasts and highlight shows, while it would also incorporate advertising breaks within ordinarily scheduled programs.

The details of the ban were published in the group’s final report on societal harms caused by iGaming, which was officially released back on June 15th. It argues that a blanket ban would be justified, due to the potential harm caused to individuals by sponsored messages that encourage participation from players within diverse age ranges.

Despite the group’s assertions, this measure seems unlikely to be rolled out for the time being, with the UK’s omnipotent Advertising Association (the AA) having initially rejected the proposals put forward by the APPG.

It’s reasoning for this position is based on the fact that such a move is deemed unnecessary at present, particularly given the existing advertising code already in place and the regulatory measures that have recently been imposed by the UKGC.

More specifically, the existing rules already require gambling operators in the UK to be socially responsible and protect the most vulnerable gamblers, while also creating provisions to safeguard underage players. These measures are increasingly stringent and enforceable through the imposition of huge financial sanctions too, and in this respect, a blanket ban would seem relatively excessive.

However, it cannot be denied that such measures are being given serious consideration by both the regulator and cross-party Parliamentarians alike, while further high-profile failures of brands to safeguard vulnerable players could easily see television advertising outlawed nationwide.

At the very least, online casino and sportsbook brands should expect to see further restrictions imposed on televised adverts in the near-term, with the decision to outlaw the use of celebrity figures to promote iGaming brands and products likely to represent just the tip of the iceberg.

How Will This Really Impact on iGaming Brands?

Interestingly, some experts have previously argued that the debate around TV advertising restrictions represents something of a phoney war, which may partially explain why operators have been so keen to consider voluntary bans on pre-watershed messaging around live broadcasts.

There’s certainly evidence to support this assertion; especially if we consider the way in which UK gambling brands spent their marketing budgets prior to the introduction of increased regulatory oversight (between the years of 2014 and 2017).

In 2017, for example, it’s estimated that nearly half of the £1.56 billion ($1.99 billion) spent on marketing by iGaming brands in the UK was committed to online and digital channels. During this period, the amount invested in television advertising accounted for just 15% of the total spend, with this number likely to have fallen further in the wake of various regulatory changes.

Overall, the total marketing expenditure by iGaming brands has increased by 56% since 2014, with the amount invested in direct online marketing (including channels such as banner ads and paid search) having nearly doubled from £400 million in 2014 and £747 million in 2017.

Interestingly, investment in online marketing channels such as social media and affiliate marketing also increased at the expense of TV messaging during this period, with these mediums allowing for more targeted messaging and a superior ROI over the course of a campaign.

So, while television advertising investment actually increased from £155 million to £234 million during the aforementioned three-year period, this has represented an incrementally smaller share of the total marketing spend in the iGaming niche. This trend has continued during the last three years too, with television having gradually lost its appeal as a viable advertising channel in the UK as more competitive digital channels have emerged.

The key takeaway here is clear; with television advertising having already become considerably less popular amongst iGaming brands in the three years between 2014 and 2017.

It has certainly accounted for a declining share of the total marketing spend in the UK during this time, with this part of a wider and more immersive trend across a diverse array of industries and marketplaces.

Make no mistake; this trend will have been further compounded by the recent regulatory and legislative changes that have been rolled out since 2018, along with a more gradual shift in how individuals consume content and messaging online.

Interestingly, this casts the voluntary TV advertising ban agreed by betting brands in an entirely different light, with the decision taken in 2019 clearly having only a minimal impact on the marketing efforts and outreach campaigns conducted by iGaming operators.

In fact, it can be argued that operators will have been more than happy to simply adjust their existing budgets and invest more in online and digital marketing channels, while simultaneously warding off the risk of potentially significant intervention by the UKGC or the government department for Digital, Culture, Media and Sport (DCMS) in the future.

Regardless, there’s no doubt that further TV advertising restrictions will have a similarly minimal impact on most iGaming brands, while even a total ban would simply prompt operators to invest more of their marketing budget online.

As we can see, this is a trend that had already begun to evolve naturally in the UK’s iGaming market, prior to the UKGC’s further commitment to safeguarding vulnerable players in 2018.

So, not only can we surmise that television has become increasingly unattractive to iGaming operators in recent times, but it also appears as though the voluntary ban agreed in 2019 may reflect the apathy that exists towards this channel in the digital age.

The Last Word – Could Online Advertising be Targeted by the Regulator?

The question that remains, of course, is whether the UK regulator could ultimately turn its fire on digital advertising channels?

We’ve already seen significant movement in this respect, with the UK advertising watchdog having penalised five gambling firms for breaking strict rules prohibiting them from targeting children with online messaging.

These firms faced financial sanctions for their actions back in 2019, while they included Aston Villa’s primary sponsor Unibet in their number.

As part of a detailed investigation, the Advertising Standards Authority (ASA) created a number of child avatars and underage online profiles to simulate kid’s web browsing, before being exposed to a total of 43 gambling-related ads across freely accessible channels such as YouTube.

These instances occurred over the course of a two-week period, while they highlight the type of issue that the UKGC will be compelled to tackle as a matter of urgency. Similarly, the government may also look to review online advertising methods and legislate if they deem it to be necessary, just as they did in the case of FOBT wagering limits.

There’s no doubt that any decision to curb online advertising channels would be far more impactful from the perspective of operators, especially in terms of their ability to target key audience demographics and promote welcome offers in real-time.

In the case of a total ban, iGaming brands would find it increasingly difficult to promote themselves at all, at least without a significant review of their marketing budgets and how this money is spent on an annual basis.

This could well become an issue over time, despite the fact that the online casino industry in the UK generates nearly £11 billion in revenue and pays more than £3 billion in tax levies. Even accounting for this and the fact that the Treasury recently increased the remote gaming duty payable by iGaming brands from 15% to 21%, neither the government nor the regulator will shy away from clamping down on practices that are thought to be harmful to the wellbeing of players.

Ultimately, this will be an interesting space to watch in the future, especially if a crackdown on television advertising practices leads to similar measures being imposed across digital channels.

The latter will be far more concerning to iGaming brands, who have increasingly eschewed TV ads in favour of digital and online marketing channels since 2014.