Government restrictions on gambling advertising and sponsorship continue to have a profound impact on brand partnerships across numerous European markets.
As the UK braces for legislation that will come into force in the coming years (you can read a relevant white paper published by ESA in May 2023), sponsors and rights holders in other countries have already demonstrated resilience by evolving and pivoting to keep the industry buoyant.
In this special guest blog by Carlos Cantó, CEO of SPSG Consulting and an ESA Awards judge, we hear the view from Spain. You can also read the view from Italy.
Can you briefly describe the changes that have affected gambling sponsorship in recent years in your market?
The legislation was released on 3 November 2020 by the Government of Spain. Basically, it banned any type of commercial communication of gambling in audiovisual means except between 01:00 and 05:00. In addition, endorsement by athletes and celebrities was prohibited, as well as any kind of promotional coupons, etc.
The legislator provided the ecosystem with a window of time to adapt to what were then existing contracts, imposing a deadline of 31 August 2021.
According to a survey conducted by LaLiga, the economic impact of the legislation from a sponsorship perspective for the sport industry was estimated at €90million, only considering football. Adding other sports, the estimated impact was €100m-110m.
The legislation, in the context of sponsorship, prohibited the on-shirt presence of gambling brands, as well as venue naming rights, among other considerations and sponsorship assets and rights.
The legislation barely affected the two main gambling entities in Spain which, combined, account for 40-45% of the market: Selae and ONCE.
The gambling industry, in Spain, is structured in two categories:
1. Private gambling – mainly this is the target of the legislation, and includes:
- On-site (casinos, bingos, gambling machines at hostelry businesses, etc), generating around €2.5bn in gambling margin.
- Online, generating around €880m in gambling margin.
2. Public gambling – mainly:
- Selae (Sociedad Estatal de Loterias y Apuestas del Estado), owned by the public administration, which provides on-site and online gambling opportunities. Extremely popular, it generates around €2.6billion in gambling margin, and €1.4bn in profits for the state. At the same time, another legislation obliges Selae to invest a percentage of their profits in sponsoring sport and cultural activities. As a matter of fact, nowadays, in mid-2023, Selae (usually under the brand name of “Loterías”) sponsors several sport federations and events, as well as advertising and promoting gambling (regardless of the time of day).
- ONCE is linked to an entity representing the community with visual limitations, and with businesses also in the hostelry sector, services to companies sector, etc. They generate around €680m gambling margin, combining on-site and online games, and employing 19,000 people. As of June 2023, ONCE is actively advertising (mass media, media in the streets, etc).
- Other regional public gambling entities.
In terms of the types of gambling, the sector in Spain is structured as follows:
- “Lucky” gambling: mainly, the ones operated by Selae (Loterías) and ONCE.
- “Networking” gambling: casinos, bingos, gambling saloons, etc.
- “Leisure” gambling (the type related to know-how and expertise): this part of the sector is affected most by the legislation. This category includes, for example, football and horse-racing public gambling activities.
How have some of the brands affected by the changes responded in an effort to maintain their sponsorship presence?
Selae and ONCE were not directly affected by the legislation so they continued to sponsor. The private brands were obliged to change their strategy and to adapt to the new framework and scenario.
How have some of the rights holders been able to react to the challenges presented?
From a rights holder perspective, it depends who is/was your gambling brand sponsor.
- In the case of Selae (under the brand Loterías), a good number of sport federations as well as events continue to be sponsored by them.
- In the case of private gambling brands, in most cases they ended their sponsorship relationships. However, selected clubs (mainly in football) found new gambling brand sponsors abroad (RCEspanyol de Barcelona, Real Betis Balompié, Atlético de Madrid, etc), meaning that there is no presence or activitation of the brand in Spain, only internationally.
Have companies from any other sectors made a clear move into the territory previously occupied by gambling companies?
As when tobacco brands were banned from sponsoring, and the sector found other categories (banks, insurance, etc), when the gambling sector was (partially) banned, the sport sector identified other economic sectors as a replacement (some of them, with poor results).
Mainly, selected football, basketball and other sport rights holders signed with NFT, fan token and crypto brands as sponsors (bitci.com, Sorare, Dapper, Socios.com, etc). In the 2021-22 season, this sector signed more than 30 sponsorship deals in Spain, compared with only two agreements the previous year.
Have any particular sports been affected most by the changes, and any organisations outside of sport, in your market?
Basically, football and basketball are the two sports that have been most severely hit by the legislation. However, other clubs, events and competitions have also suffered losses (handball, for example).
What is your advice for agencies and other organisations preparing for the impact of similar changes in a market such as the UK?
From a pure sponsorship perspective, you have to adapt your strategy to the regulations, identify how your business will be impacted by it, and where will be the “doors/gates” in the legislation that allow you to keep some of the business.
From a legislation perspective, the regulation should be consistent and coherent. Should the challenge be the level of addiction of gambling, which is a real social problem, the first response should be the enhancement of educational activities to tackle the problem. And secondly, to treat all the gambling sector players equally, especially when it comes to advertising, commercial activities and sponsorship opportunities.