Inside Asian Gaming

INSIDE ASIAN GAMING | December 2009 42 sponsorship deal for their brand bwin.com with Monaco football club. Whilst the French regulatory position is due to be relaxed in 2010, visiting teams are likely to continue to have to remove the logos of gambling operators from their shirts when visiting EU Member States such as Portugal and certain German states. Norway is a non-EU country that nonetheless adopts or tracks much EU legislation through its membership of the EEA. When Spanish side Valencia played there recently it did so without its Unibet shirt logo. To further add to the confusion, Switzerland (which is neither a member of the EU nor of the EEA) also outlaws shirt sponsorship by gambling companies, with Real Madrid being forced to remove the bwin logo for their recent game against FC Zurich. European law, through European Court of Justice (ECJ) rulings in cases such as Gambelli and Placanica, has until recently largely (but equivocally) favoured the gambling operators. Whilst the ECJ has generally accepted that restrictions on gambling operators by Member States are capable of being justified (in particular, in order to prevent the exploitation of gambling for criminal or fraudulent purposes), such justifications have always been subject to the principles of proportionality and non-discrimination between Member States. This wouldmean, for example, that if a Member State prevented overseas operators from advertising in that jurisdiction, based on an argument that it wanted to limit participation in gambling, then it would find it extremely hard to justify allowing that state’s monopoly operator to advertise. The European Commission has also pursued infringement proceedings against states which ban commercial online gambling but license state monopolies to undertake similar activities. The gambling industry has generally believed (and largely still does) that the European market will eventually be liberalised and regulated. However, the recent ECJ ruling in the case of Bwin v Santa Casa da Misericordia de Lisboa has shaken that confidence somewhat. The ruling dealt with questions referred to the ECJ by a Portuguese court. It concerned an action brought by the state monopoly gambling operator Santa Casa against Bwin and the Portuguese Liga (football league) regarding Bwin’s sponsorship of the latter. The partners had argued in their response that Santa Casa’s monopoly was incompatible with EU law. However, the ECJ concluded that Member States may be justified in confining the operation of gambling within “controlled channels” (i.e. granting a monopoly operator the exclusive right to operate and advertise internet gambling services) if this is necessary to meet wider public interest objectives such as protecting consumers against fraud on the part of operators. It remains to be seen what impact the Bwin case will have on the European gambling landscape, but the likelihood is that it will stall the liberalisation of the market and preserve the existing polarisation between national approaches. As a result, sponsorship by gambling operators in certain countries is likely to remain unlawful for the medium term, and teams with gambling shirt sponsors will continue having to remove the logos when playing away fixtures in those countries. Conclusion It is clear that the recent rapid increase in the number of Asian gambling operators sponsoring European football clubs is no accident. It is the result of a combination of favourable factors including the economic and regulatory environment and the ability to use sport in particular to create global exposure amongst the gambling companies’ target demographic. It seems likely that gambling operators will continue to spend large proportions of their marketing budget on football sponsorship, at the very least until the value of, and competition for, those sponsorship rights increases with a wider economic recovery. Until then, and quite probably further into the future, the Asian gambling industry will remain one of the most attractive places for football clubs to seek sponsorship revenues. Nevertheless, the inconsistency of the European regulatory environment, and even the restrictions contained in the relatively permissive British regime, mean that gambling sponsorship deals are full of potential pitfalls, as 777ball in particular has found to its detriment. Parties on both sides of these deals would be well advised to seek specialist advice on how to navigate them. By Andrew Danson, Associate, Olswang Olswang is a full service European law firm specialising in the gambling, media and technology sectors. The firm advised Tottenham Hotspur FC on its shirt sponsorship deal with gambling and entertainment group Mansion, bookmaker Boylesports on its shirt sponsorship deal with Sunderland FC and its broadcast sponsorship deal with Sky Sports, and Fulham FC on its sponsorship deal with gambling operator Bodog. Andrew provides commercial and regulatory advice in relation to gambling, sport, broadcasting and advertising / sponsorship matters. andrew.danson@olswang.com Showing character–Chinese on Tottenham’s MANSION.com away strip Regulation