The Spanish Government has published a proposal for measures which, if passed, will restrict gambling advertising in Spanish football. One of the proposed measures is the ban of gambling sponsors on football shirts. Although the measures are designed to protect consumers, they could have could have significant financial implications for Spain’s top clubs. It is worth noting that similar measures have also been recommended in the UK and elsewhere in Europe.
New Draft of Royal Decree on Commercial Communications for Gambling Activities
In February 2020, The Ministry of Consumer affairs in Spain (Ministro de Consumo) proposed a new Royal Decree containing measures designed to regulate the conditions under which gambling operators with a license in Spain can carry out advertising, sponsorship or promotional activities in Spanish football.
The latest draft, published on 30 June 2020 (the ‘New Draft’), goes further than the first iteration by introducing stricter restrictions, incorporating a large part of the severe ’emergency’ measures introduced by the Spanish Government to restrict gaming advertising as result of the global health crisis (Royal Decree-Law 11/2020 of 31 March 2020). One of the most significant additions to the New Draft is the proposed ban of gambling sponsorship on football shirts (Chapter 2, Article 12 of the New Draft), which was notably absent from the first draft.
The New Draft is expected to be approved by The Council of Ministers (Consejo de Ministros) in October, but there has not yet been any official announcement to this effect. If approved, the measures under the New Draft will enter into force in Spain.
The publication of the New Draft attracted criticism and concern from La Liga, where “professional clubs stand to lose as much as €80 million (US$93.1 million) from altering their deals with bookmakers” and “[w]hile they will be able to continue some type of relationship, contracts could be worth just 30 per cent of their current value”. As a result of its concerns, La Liga entered into talks with the Spanish government aimed at minimising the financial impact of the new measures on clubs, with La Liga’s director of business commenting, during a conference in which La Liga itself announced its own betting sponsor M88, that:
“this is a very complicated year for the clubs on a financial level. So what we are doing is talking to the government to do it in the best possible way, understanding that they want to regulate the betting online”.
Gambling companies represent an important source of revenue for Spanish clubs, with 17 La Liga clubs maintaining commercial ties with a gambling brand. Contracts continue to be signed and as of September 2020, 35% of La Liga clubs will feature a gambling company on the front of their shirt for the 2020/2021 season. That is one less than last season, one less than the Clubs participating in the 2020/2021 English Premier League and seven more than the Clubs participating in the 2020/2021 German Bundesliga.
The UK position
The introduction of new restrictions in Spain will be of interest in the UK which has also been considering this issue with a House of Lords Select Committee established to look into gambling regulation in the UK and the introduction of a new Gambling Act. The Committee published a report on 2 July 2020 containing recommendations for reform in the UK. One of the recommendations from the report replicates the proposed ban in the New Draft from Spain, suggesting that gambling operators should no longer be allowed to advertise on the shirts of sports teams or any other visible part of their kit (this is not a restriction under the Gambling Act 2005 which is currently the main piece of legislation regulating gambling in the UK).
The report acknowledges that the restrictions including the ban of sponsors on shirts would have a serious effect on clubs below the Premier League and that some of those clubs in the English Football League will struggle financially without this sponsorship if they cannot find alternative sponsors. The report also recognises that the financial situation of some of those clubs is currently particularly fragile because of the impact of the coronavirus pandemic on sport. As such, it recommends that clubs should be given more time (the report suggests three years) to adapt to the new situation, but that during those years clubs should not be allowed to enter into new sponsorship contracts with gambling companies. Existing contracts could however continue until they are due to terminate.
Elsewhere in Europe
Although the proposed measures in Spain and the UK have not yet been made into law, Italy has already passed strict regulation in this area. As a result of the introduction of the so-called ‘Dignity Decree’ (Decree Law no. 87 of 12 July 2018, as amended), from July 2019 all gambling-related sponsorships and advertising partnerships have been prohibited in connection with sporting and cultural events. The effects of the ban have already been felt by Italian clubs, which were under pressure from the financial strain caused by the global health crisis. Back in April 2020, a plea was issued to the Italian government by Italian sports leaders (led by Serie A, Italy’s premier football league), asking for the blanket ban to be suspended for 12 months in order to support the sporting industry through the pandemic. The Chairman of Italy’s Olympic Committee, Giovanni Malagò, stated that: “we are in an emergency and instead of asking for money, it is appropriate to restart any potential marketing action with the betting companies. I have always been totally against the ban, which weakened our teams and our sports facilities”. Serie A also reiterated its position that Italian football will be denied a €100 million in vital revenues from betting sponsorship and advertising. However, despite the concerns, it appears that there are no signs of the ban being lifted.