Big payout looms in gambling ad sector

Relaxation of the UK's gambling rules is expected to generate a wealth of new advertising this year. Ellen Bennett reports on how the interested parties are gearing up for this potential ad bonanza.

From September, a new type of ad will be featured on television and radio. For the first time, the highly regulated gambling sector will be allowed to advertise on broadcast media and it is already getting its campaigns in place.

In a climate of ever-tighter red tape, with junk-food ads being pulled off the air, the Government's relaxation of the rules relating to gambling is unique, which could be good news for advertising agencies, media owners and gambling companies alike.

Gambling firms are already in discussions with media agencies about the campaigns they will launch in September: Ladbrokes has hired M&C Saatchi to develop creative approaches; SkyBet, which works with MediaCom, is looking at whether it can increase its marketing budget, and betting exchange Betfair has confirmed it is considering a television campaign.

Tim Irwin, joint managing director of Betfair's agency BJK&E, says: "The very nature of betting is that it is based around sport, and sport as entertainment is based around television, so they are natural bedfellows. We will see a number of players moving into TV from September."

Media agencies are excited at the prospect of a cash-rich new sector, with some wilder estimates suggesting gambling could provide up to £250m additional revenue each year. Are these too optimistic or could gambling really be a potentially lucrative stream of new business?

Gambling deregulation

Ken Mansfield, client director at Ladbrokes' media agency Pure Media, cautions: "We don't know if it will work and we won't until we get some significant response to the various campaigns that will start in September. Advertisers will only go somewhere if they see a significant return."

The loosening of the advertising rules comes on the back of the Government's broader, highly controversial, deregulation of gambling contained in the Gambling Act 2005 and due to come into force this year, which will also see the development of a host of new casinos, including a Las Vegas-style "super casino" in Manchester.

This has contributed to a massive boom in the gambling sector. Not only are the traditional high-street bookmakers thriving, but whole new sectors of online bookies and poker sites are experiencing phenomenal growth. Although largely restricted to outdoor and online advertising at present, the industry still managed to spend more than £40m in 2006. That does not include advertising for the Lottery, which is already allowed to advertise on television.

Poker companies, online casinos and betting exchanges such as Betfair spent more than £10m between them, according to Nielsen Media Research.

Gambling companies are also allowed to sponsor sports teams - and have leapt at the chance. Last August, online firm Mansion paid £34m to have its logo on Tottenham Hotspur's shirts; 888.com sponsors Middlesbrough, and 32Red has bought the Aston Villa shirt.

This new breed of firms has a message to send and the money to send it with. For example, Betfair yesterday launched a significant campaign that will see it dominate outdoor advertising.

However, the new opportunity has also to be treated with an element of caution. Gambling companies and their agencies are anxious to point out that broadcast is an untried medium for this sector.

Cautious approach

Media owners are also treading carefully. Kelly Williams, Channel Five's director of sales, says: "We are not expecting a huge increase in TV advertising. There will be some, but it won't be a huge amount."

The Government has also laid stringent conditions for advertising (see box). Sports minister Richard Caborn has threatened to step in if he finds advertisers do not toe the line. And while this is good news for advertising, it could have a knock-on effect for all those lucrative sponsorship deals that have until now sucked up much of the marketing cash.

Gambling companies agree and say they will not expand their marketing budgets until they see the benefits. Dave McIntosh, Sky Bet's marketing manager, says: "In the first instance, it may well be redirected budgets." But he and his peers are allowing themselves a degree of excitement about the new opportunity. "It will get a brand element in the marketplace for more or less the first time," he adds.

One thing's for sure: £250m may be pie in the sky, but from September there will be new money out there - and new ads on the airwaves.

GAMBLING AD RULES

From September 2007, when the Gambling Act 2005 comes into force, gambling firms will be able to advertise on broadcast media. The advertising must be "socially responsible", with specific rules stating it must not:

- Be directed at children or feature people who are, or who appear to be, under 25

- Suggest gambling can be a solution to money problems

- Link gambling to seduction, sexual success or enhanced attractiveness

- Suggest gambling is a rite of passage, or link it to toughness, resilience or recklessness

- Suggest gambling can improve self-image or self-esteem, or portray it as a way to gain control, superiority, respect or admiration

- Portray, encourage or condone gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm

- Exploit the susceptibilities, aspirations, credulity, inexperience or lack of knowledge of children, young people or otherwise vulnerable people

- The Advertising Standards Authority will be responsible for enforcing these conditions.

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