Inside Asian Gaming

December 2009 | INSIDE ASIAN GAMING 43 gambling operators to showcase their brand beforemillions of sports fans around the world, including in their home markets. In some European jurisdictions, the explosion in gambling sponsorship has been facilitated by a change in the legal framework. The best example is Britain, where offshore bookmakers were not permitted to advertise (by way of sponsorship or otherwise) prior to September 2007, and online gaming operators were heavily restricted in the way in which they could advertise. However, the British regulatory regime was transformed on 1st September 2007, when the Gambling Act 2005 came into force. This new Act permits the advertisement of gambling services in Britain by any operator licensed in Britain, the European Economic Area (EEA), including Gibraltar, and any territory on the Government’s “White List”, which currently includes Alderney, the Isle of Man, Tasmania and Antigua. In a number of these jurisdictions it is possible for Asian online gambling operators to obtain a gambling licence, subject to meeting the relevant licence requirements which typically relate to being fit and proper persons to provide gambling services and ensuring that customers are protected in terms of fairness and financial stability. For example, 118Bet and SBOBET are licensed in the Isle of Man, whilst Mansion is licensed in Gibraltar. A further key driver behind the growth in gambling sponsorship deals has been the state of the wider economy, and the impact of the recession on the cost of football sponsorship. Total shirt sponsorship revenue for England’s Premier League clubs has fallen by £10 million (US$16.4 million) in two years, and the result has been cut-price shirt sponsorship deals for Premier League clubs unlikely to qualify for European club competitions. For example, 118Bet’s deals with Wigan and Bolton are reportedly worth £650,000 and £750,000 per annum respectively. By contrast, the gambling industry has proved relatively resilient to the effects of the downturn, and so has been able to take advantage of these relatively cheap sponsorship opportunities as they have arisen. Challenges If the opportunities highlighted above did not outweigh the challenges, we would not have seen the proliferation of gambling sponsorship in football that has taken place. Nevertheless, there remain significant obstacles to Asian gambling operators wishing to enter the European football sponsorship market. Britain is generally considered by the gambling industry to be the most developed regulatory regime in Europe, and (the tax treatment of gambling aside) a good model for other countries to follow. However, as part of the regulatory regime, there are a number of restrictions on gambling operators’ sponsorship activities. For Asian-based gambling operators, the key advertising- related offence under the Gambling Act is advertising foreign gambling.This offencemakes it unlawful to advertise any gambling operator in Britain which is not based either within the EEA or in a jurisdiction on the White List. In practical terms, this means that it would be unlawful for a British football club to display the logo of any gambling operator not licensed in any such jurisdiction. It also means that any overseas football club with a shirt sponsor without a qualifying licence will have to remove the logo from its shirts when playing in Britain. Indeed, the Gambling Commission has already shown its willingness actively to enforce this law by blocking a shirt sponsorship deal between Cardiff City football club, a member of the second-tier league The Championship, and the Philippines-based online gambling operator 777ball. As a result, Cardiff City quickly signed a replacement deal with SBOBET, and 777ball lost its opportunity. In addition, the Spanish club Sevilla recently played its UEFA Champions League away fixture against Scotland’s Glasgow Rangers without the logo of its shirt sponsor, 12bet, which is also not licensed within the EEA or a White List jurisdiction. Outside Britain, European laws relating to the advertising of gambling are extremely inconsistent, and operators wishing to advertise and/or provide gambling services across the EU face a patchwork of conflicting national laws. Some European states share the British view that the public interest is best served by allowing the private sector to provide consumer choice (subject to regulation to prevent consumer exploitation and fraud), and that the state’s interest is best served by collecting significant tax revenues and licence fees from operators. States taking this approach (or that are at least moving towards liberalisation and regulation) include Malta, Italy, Austria, Spain and France. However, a number of European states have fought to preserve highly lucrative state monopolies over the gambling market, arguing that a single state-run operator is a better way to protect the public than regulating a liberalised market. These states often prevent overseas gambling operators from advertising, including by means of sponsorship. Famously, in 2006, the two Austrian chief executives of online gambling operator Bwin International Ltd, Manfred Bodner and Norbert Teufelberger, were arrested by the French authorities as they travelled to France to unveil a new Lucky for some–Valencia’s sponsor 888.com Ancient roots–Portugal’s state gambling monopoly