The leaders of some of the country’s biggest media, wagering and sports businesses are bracing for potential changes to advertising rules that may result in a total ban of gambling advertising.
Multiple wagering, sports, and media sources, who spoke on the condition of anonymity, said they expect the report – authored by the parliamentary Standing Committee on Social Policy and Legal Affairs, following an inquiry into online gambling harm – to recommend a total ban on gambling advertising to be rolled out over a four-year period.
The federal government is not required to adopt the recommendations delivered by the committee, which could land this week. While a complete ban would be an extreme measure, the media and the gambling industry are both reviewing the potential fallout from any such move.
The biggest cause of gambling harm in Australia is poker machines – the majority of problem gamblers in treatment have machine-related addictions. But many gambling harm experts say gambling advertisements can encourage young people and those with existing gambling problems to seek out betting when they would otherwise abstain.
Responsible Wagering Australia – which represents some of the country’s biggest bookmakers, including Sportsbet and Entain – argues that restricting regulated wagering providers from advertising will only entice those at risk of gambling harm to seek out unregulated bookies, who will not abide by the rules.
Industry stalwart Tabcorp has joined harm advocates in calling for a total ban on broadcast advertising during the inquiry, with chief executive Adam Rytenskild dubbing it a “line in the sand” moment for the industry. While rivals have accused Tabcorp of taking this position to protect its market share, they concede that the public is against the proliferation of betting ads.
Tabcorp CEO Adam Rytenskild in April.Credit: Alex Ellinghausen
“Any reduction to gambling advertising is going to have a significant impact on commercial television broadcasters and the services we provide free to all Australians, so they should be balanced by reductions in other regulatory burdens, for example removing spectrum fees,” Bridget Fair, CEO of Free TV Australia, said.
Free TV Australia, which has acted on behalf of Seven, Nine (the owner of this masthead) and Ten has proposed a frequency cap which would curb the number of gambling advertisements on television, though questions have been raised about the feasibility on broadcast video on-demand services (BVOD), which would require co-signing from third parties.
In 2021, both Nine and Seven were found to have breached the Australian Communications and Media Authority’s (ACMA) rules around gambling advertising by showing betting promotions during sporting events. Seven was issued with a formal warning for breaches on its live stream during its Olympics coverage.
Although dwarfed by major categories including food and automotive, gambling is one of the top 20 biggest advertising categories in Australia.
Data from Nielsen’s Ad Intel Panel claims gambling and gaming companies spent about $310 million on advertising 2022, with the top five spenders including Sportsbet, Tabcorp, Entain (Ladbrokes and Neds) and Pointsbet. The figure has risen year-on-year, with $287.2 spent in 2021, $271.3 million in 2020, and as low as $89.7 million in 2011.
Sources familiar with this data said that more than 50 per cent was spent with commercial television networks, an unsurprising amount given reach of free-to-air audiences. The second most used medium – and a fast-growing one – was digital advertising, which includes YouTube, TikTok and Instagram.
The figures, however, do not account for the millions of dollars spent by wagering companies on sponsorship of stadiums, sports clubs, and sports competitions, not to mention podcasts. When considering these figures, advertising sources believe the total figure spent by the wagering sector blows out to more than $600 million a year.
Advertising figures do not take into account other forms of investment, such as in ground sponsorship.Credit: Getty Images
Broadcasters fear any ban will unfairly target traditional media avenues including television and radio, which are already subject to tight regulations, while “new age media” including YouTube and TikTok will continue to boom largely outside the scope of regulation.
At least four members of Nine’s broadcasting talent have recently been approached by one of Australia’s biggest bookmakers to appear on YouTube and TikTok endorsements, according to sources within the company, indicating a push from wagerers to shore up alternate options if a broadcast ban comes in.
The last two years have seen major long-term broadcast deals signed with sporting bodies including Tennis Australia, Cricket Australia, the NRL and AFL, which has led to industry sources suggesting commercial networks could seek a discount if they lose out on vital ad dollars.
All the sporting rights deals currently in place were agreed upon economics that included gambling advertising, one senior executive told this masthead, though another noted a discount would be unlikely.
Those economics helped the AFL strike a landmark $4.5 billion, seven-year deal with Foxtel and Seven in 2022, the broadcasting combination also securing seven more years of summer cricket coverage with a $1.5 billion deal with Cricket Australia in January this year.
Nine, the publisher of this masthead, also recently agreed a $425 million, five-year extension with Tennis Australia to broadcast the Australian Open through until 2029, as well as a bumper deal with the NRL in December 2021.
The inflation of broadcast rights have mirrored increased advertising investment from wagering firms towards TV networks, aided by the entry of digital firms such as Sportsbet and Bet365.
Former AFL footbller Nathan Brown hosts another Sportsbet ad.
Sponsorship deals add an extra complexity to any potential broadcast advertising ban, which would not regulate against sporting bodies or stadiums accepting money from wagering companies.
The AFL and NRL both have deals with Sportsbet worth $8 million and $12 million per year respectively, while Cricket Australia receives $3.5 million annually from its deal with Bet365. The majority of NRL teams also have a gambling sponsors present on their jerseys.
Data from Nielsen Sport in 2022 found the NRL sleeve sponsor to be the most valuable advertising piece of advertising real estate in live sports broadcasting, due to its prominent positioning.
Several sporting bodies also receive a cut of turnover from bets placed on matches, referred to as “product fees”, AFL chief executive Gillon McLachlan told the inquiry in April.
The NRL told Four Corners this month it earned as much as $50 million from such deals, with the AFL’s figure estimated between $30 million to $40 million.
While the commercial networks could be set to be the biggest losers of any such ban, last month the Coalition proposed the removal of the broadcast spectrum tax to level the playing field with the digital platforms.
The tax is worth an estimated $10 million annually for each network, and one executive suggested while it would not fill the gap left by gambling advertising revenue, it would “cushion the blow”.
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