Thursday, 23 September 2021

New Report Suggests Gambling Shirt Sponsorships Will Be Banned

Gambling Shirt Sponsorships

The UK Government is reportedly considering banning gambling companies from sponsoring sports teams’ shirts as part of its review of the Gambling Act 2005, according to a new report from the Daily Mail.

The Government launched its review of the Gambling Act 2005 last year with a call for evidence which ended in March. Ministers are set to release a white paper either at the end of the year or in early 2022, and there will be a three-month consultation period before the bill is sent to Parliament.

The Daily Mail’s report suggests that sports betting sponsorships will be banned, as previously hinted at by several MPs, and that Ministers are considering a ban on televised gambling advertisements and pitchside hoarding, though the report states that these are unlikely to be implemented.

A source close to the review told the Daily Mail: “We are pretty sure there is going to be an end to front-of-shirt advertising. Everybody is expected that. Reformers want more but a lot of politicians are worried about the lower leagues. The Government thinks front-of-shirt will catch the headlines and it will feel like it has made a bold statement.”

At the time of writing, almost half of all English Premier League football clubs and six clubs in the Championships have front-of-shirt gambling sponsors. The sponsorships and gambling’s close relationship to sports have faced heavy criticism from campaigners and politicians for exposing vulnerable people and minors to gambling.

A potential ban on front-of-shirt gambling sponsorships has sparked concern for football clubs that are largely dependent on the funds from sponsorships. The English Football League (EFL) wrote to the DCMS last Autumn over concerns about a football sponsorship ban and warned the Government that such a ban would cripple lower league clubs who were already on a “financial knife-edge” to the Coronavirus pandemic.

DCMS Publishes Findings Into Collapse Of Football Index

The UK Government’s Department for Culture, Media, and Sport (DCMS) has this week published the findings of its review into the collapse of Football Index and the UK Gambling Commission failure and involvement in the firm’s collapse.

Football Index fell into administration in March this year after a number of users abandoned the website following its decision to reduce the dividends paid for player transactions. Around the same time, the website, which allowed players to trade shares in football players, had its UK Gambling Commission license suspended and its membership to the Betting and Gaming Council revoked.

The DCMS launched its review in April and has now published its findings. The review, led by Malcolm Sheehan QC, examined Football Index’s collapse and found that its parent company BetIndex failed to inform the Commission of changes to Football Index’s business after its launch back in 2015.

The DCMS review also found that Football Index was operating on the wrong type of license – a fixed-odds betting license – and that the website’s main feature of selling shares was not disclosed by BetIndex during its application process, but was on the Football Index website, which was reviewed by the UK Gambling Commission twice before its launch.

What’s more, the review suggests that the Commission had not properly regulated the betting website for its first three years of operations due to it possessing the wrong license. It wasn’t until 2019 that the Commission raised questions of whether Football Index required an exchange license, but only after prompted so by French gambling regulator ARJEL.

As reported by iGamingBusiness, the DCMS review then stated that it was unsure whether earlier action from the Commission could have prevented Football Index from collapsing due to the sheer number of external factors at play, including the Coronavirus pandemic. However, it suggested that the Financial Conduct Authority (FCA) should have been quicker to determine whether Football Index fell under its regulation, as it wasn’t until September 2019 – four months after the Commission first contacted the organisation – that it suggested the website should be dual-regulated.

Newly appointed Gambling Minister Chris Philp said in a statement: “I’m extremely conscious of how devastating the collapse of Football Index has been on its many customers, which is why we moved quickly to launch this independent review. We have been clear that we must learn lessons to make sure a situation like this does not happen again.

“I’m encouraged to see [that] the Gambling Commission and the FCA are taking concrete steps on an action plan on how they will better work together. We will ensure that the findings from this review feed directly into our ongoing Gambling Act Review, which is looking at ways we can improve regulation of the gambling industry.”

UK Gambling Commission Announces Changes Following Football Index Investigation

The UK Gambling Commission has announced changes to its regulation of digital gambling products following the publication of the DCMS’ investigation into BetIndex and the collapse of its Football Index website.

According to the Commission, the changes include factoring any “novel products” such as the exchange platform used by Football Index when assessing operator risk and the strengthening of its Memorandum of Understanding with the FCA to better escalate issues between gambling and financial services.

UK Gambling Commission CEO Andrew Rhodes, who was appointed to the post back in June, said in a statement: “No amount of explanation of what happened to Football Index will take away the justifiable hurt and anger its customers are experiencing having lost, in some cases, life-changing amounts of money when the gambling company collapsed.

“We accept and agree that we should have drawn a line under our efforts sooner, but this does not mean those customers would not have lost money in the event of the BetIndex company collapsing. Throughout this case, we sought the best outcome for consumers within the scope of our regulatory powers.”

He continued: “The review provides a number of helpful recommendations for how both regulators can work better together and for how our regulatory approach deals with novel products. In recent years we have seen an increase in the complexity of business models and product offerings. The lines between what is gambling and other types of products, such as financial services or computer games, has become increasingly blurred and no longer neatly fit into existing statutory definitions of gambling.”

“We have already acted on a number of the recommendations in the report. This has included more explicitly including novel products as one of the factors we consider as part of our assessment of a gambling company’s risk. We have also further strengthened the Memorandum of Understanding we have with the FCA so that issues that blur the lines between financial services and gambling are escalated and actioned more rapidly.”

Andrew Rhodes ended the statement by saying: “Our actions were always focused on trying to protect consumers while we sought to bring the operator into compliance with regulations. This does not mean however that those customers would not have lost money in the event of the BetIndex company collapsing.”

The above changes come days after the Parliamentary All Party Betting and Gaming Group (APBGG) announced the launch of an inquiry into the effectiveness and competence of the UK Gambling Commission after receiving several criticisms of the regulator in reports published in 2020.

The APBGG has encouraged all gambling operators and advisers to anonymously submit criticisms of the Commission and any evidence they believe shows the regulator acting in an “unacceptable” manner. A deadline of October 31, 2021, has been set, and the APBGG will reportedly submit its findings to the DCMS to help inform the ongoing Gambling Act Review.

Meanwhile, the above news comes after the UK Gambling Commission approved an £800l settlement for a new public health programme on gambling-related harm. According to reports, the programme will run for three years in the Yorkshire and Humber region and aims to educate people on the risks of gambling while providing access to support and treatment for individuals and families affected by gambling harm.