Gambling advertising restrictions: Tabcorp pushes to reduce gambling harm
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The world’s biggest sports betting companies are targeting punters on platforms such as TikTok, YouTube and Spotify, as the government says it will scrutinise social media platforms as well as traditional television networks.
Gambling businesses, sports codes and regulators will front a parliamentary inquiry into online gambling on Tuesday, with industry players expected to highlight regulatory loopholes and argue more regulation won’t solve the issue it seeks to remedy: gambling harm.
The biggest cause of gambling harm in Australia is poker machines – with the majority of problem gamblers in treatment due to machine-related addictions. But many gambling harm experts say gambling advertisements of any description can ensnare young people and those with existing gambling problems into betting when they would otherwise abstain.
Sources close to the organisations, who spoke anonymously because of the ongoing inquiry, told this masthead the major broadcasters and sports codes are concerned about the financial impact of further restrictions on wagering advertisements, particularly when ads on new-age platforms with bigger and younger audiences including podcast streaming services, TikTok, YouTube and Instagram are booming largely outside the scope of regulation.
Online wagering behemoth Sportsbet, which is owned by Irish company Flutter, spent more than $300,000 on two types of TikTok advertisements last month, according to data obtained by this masthead, which were viewed more than one million times. The cost per audience view is estimated to be less than 20 cents.
A spokesperson for TikTok Australia, which is typically used by younger audiences, said its advertising trial with Sportsbet was “strictly controlled” and the content is only being shown to users over the age of 21 years at a capped frequency. TikTok also said it had enabled an opt-out feature for those not wishing to see the ads.
Sportsbet may have an exclusive trial with TikTok, but it’s far from alone in bolstering its online ad strategy. It’s now difficult to tune into a sports podcast on Spotify or Apple or browse a sports website without being exposed to a gambling sponsorship of some description. Live reads for overseas gambling companies such as FanDuel on US basketball and NFL podcasts are played widely (FanDuel is owned by Flutter and not allowed in Australia). And wagering companies spend millions of dollars on YouTube, especially when a major horse racing event is on and it wants to promote its odds.
A spokesperson for the Minister of Communications said the government inquiry is aimed at addressing community concerns surrounding gambling harm across all platforms including social media, and will consider the inquiry recommendations when it releases its full report.
“The House of Representatives Standing Committee is considering the effectiveness of current advertising restrictions on limiting children’s exposure to gambling products and services, including through social media, among a range of other issues,” the spokesperson said.
Although dwarfed by major categories including food and automotive, gambling is one of the top 20 biggest advertising categories in Australia. This puts it just behind the government in terms of total advertising spend.
Despite the growing prevalence of online ads, the debate on gambling advertising has largely focussed on commercial television and advertising that appears before or after sports matches. The commercial television industry is banned from airing gambling ads in live sport on television before 8:30pm. The ban also extends from five minutes before the commencement of an event, and five minutes after play. After 8:30pm, the ads are limited to before and after play and scheduled breaks. These rules do not apply on horse racing channels or during events.
The rationale for these rules is to prevent those at risk of gambling harm – particularly young people or those with existing problems – from being unnecessarily exposed. It’s also far easier for regulators to police established broadcasters which rely on licences than the nebulous world of the internet. Some wagering companies argue the advertising debate distracts from the real issue of consumer protection, and the existing regulations coupled with their internal monitoring systems should be sufficient.
When Free TV chief executive Bridget Fair, who represents the interests of Nine Entertainment Co (the owner of this masthead), Seven West Media and Network 10 appeared at the Senate inquiry in February, she said current regulation was largely misunderstood. It also doesn’t account for the introduction of responsible gambling messages, which began rolling out over the weekend with taglines such as “you win some, you lose more” and “chances are you’re about to lose”.
“Our view is that we need to have a balance,” Fair said. “Obviously, there are some people who have problems with gambling … but in a context where a service is advertising a legal product, we need to have appropriate rules in place that are aimed at providing the appropriate levels of protection,” she said. “The current rules provide those appropriate levels.”
Data from Nielsen’s Ad Intel Panel claims about $310 million was spent by gambling and gaming companies on advertising 2022, the majority of which came from Sportsbet and Tabcorp. This was an increase on the 2021 figure of $294.3 million.
Sources familiar with this data said that more than 50 per cent was spent with commercial television networks, an unsurprising amount given the millions of people broadcasters have the potential to reach. But the second most used medium – and a fast-growing one – was digital advertising, which includes YouTube, TikTok and Instagram.
What the figures do miss, however, is an important part of the puzzle: they 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.
PointsBet’s sponsorship of the Manly Sea Eagles, BlueBet stadium, and podcasts dedicated to the NBA and NF – the world’s biggest betting sports – are just some examples of the way these gambling companies became part of everyday vernacular.
Advertising sources believe the total figure spent by the wagering sector blows out to more than $600 million per annum when considering these other less traditional forms of advertising.
This makes the conversation about reducing harm complex and frustrating for television broadcasters. If the Senate proceeds with a recommendation proposed by Tabcorp to further reduce advertising on television, it can only be viewed as a Band-Aid fix.
Tabcorp’s chief executive, Adam Rytenskild, would like to see gambling advertising stopped between 6.30am and 8.30pm on free-to-air television as a first step to reducing gambling harm. His position is opposed by the television broadcasters and people like Racing NSW CEO Peter V’landys.
If these restrictions are not introduced, the wagering giant has said in a submission to the inquiry it will voluntarily stop advertising between these times, putting it at odds with the rest of the industry which argues the current regulations are sufficient.
A submission from the University of Sydney’s Gambling Treatment and Research Clinic to the inquiry said bans on sports broadcasts are “highly unlikely to be effective”.
“It is naive to assume that most teenagers are not watching sports after 8:30pm, are not impacted by seeing their favourite players wearing uniforms branded with gambling company branding, and that they do not see advertising that occurs during breaks in play,” the submission said. “Thus, the current advertising limitations are unlikely to provide any protection to this vulnerable group.”
Dr Hunter Fujak, author of the recently published Code Wars and a Deakin University academic, says restricting sponsorship is unlikely to have an effect on the sporting codes.
“Gambling really only affects the major comps – once you get past AFL, NRL and cricket, you know, the argument diminishes significantly. If their revenue does go down, it’s not exactly an existential threat to their existence, right like the cost base of these organisations just shift as their revenue shift.”
But he says any further restrictions are likely to have a large impact on the value of sports rights.
“It’s a very interesting question for Seven specifically because they have a locked in their price for AFL for quite a long period of time,” Fujak said. “If the government came in now and said no more gambling, how could they possibly recoup their revenue?”
“The assumption that they’re gonna get this money from the gambling companies isn’t enough to bankrupt them, but damn, it’s gonna absolutely blow a hole in terms of their financial budgeting for what they thought these rights were worth.”
The challenges run deeper than just sponsorship: one of the biggest beneficiaries of gambling advertising are platforms such as Meta, the owner of Facebook and Instagram, YouTube and TikTok. This is a rapidly growing piece of the broader gambling advertising pie, and yet it is not regulated. DIGI, the industry body that lobbies for Google, Meta, TikTok and other online platforms, said its stakeholders self-regulate.
“Approaches to this issue can include a review of requests to advertise gambling and betting services to Australian users of their services; restrictions on advertisements for sports betting and lotteries from advertisers who hold licences or certificates from Australian authorities; restrictions to protect under-18s from being exposed to such advertising,” it said.
Online gambling ads are governed by the self-regulatory codes of practice developed by the Australian Association of National Advertisers. Its wagering code means platforms should prohibit content that targets children or suggest they participate in gambling, exaggerate the likelihood of success, or connect gambling and alcohol. Most online platforms also have inbuilt age-gating which can make it easier to prevent ads from circulating to children – but not all, and some are easily outmanoeuvred.
Monitoring the saturation of wagering ads across these new platforms is difficult. Not only is there no overarching regulator, but each operating model tends to differ which complicates tracking accountability.
For instance, Apple Podcasts does not derive revenue from advertising on its platform, the creators of each podcast do. As a result, Apple’s advertising guidelines are just one sentence long: “all advertising must be in compliance with applicable law”. Spotify is a near-identical podcasting platform but does make money from advertisements and identifies gambling as a “restricted” category, meaning it reserves the right to reject, remove or request modification to any ad.
For Google, which owns YouTube, this works by only allow ads that comply with “internal policies” and those that are licensed by a relevant state or territory.
A Google spokesperson said the ads are only served to logged-in users over the age of 18, and that it gives advertisers the ability to restrict the age of the person receiving their content. Google also gives YouTube creators the ability to decide what ads run against their content and the ability for a person to see fewer ads in particular categories through the ‘My Ad Center’.
Meta, which classifies online gambling and gaming as anything where a value is included as an entry or prize, requires advertisers to request written permission to target each territory and to provide evidence that its activities are appropriate licensed. It claims it restricts targeting to people over the age of 18 (it can only do this if a person registers, as viewers are now asked to provide photographic identification to prove they are over the age of 18).
Regardless of what happens, regulation will have a negative financial impact on the sector. But Morningstar analyst Brian Han said it won’t make a big dent in the overall advertising market.
“What a tighter restriction on gambling advertising would do is to reduce the competitive tension (demand) for advertising inventory, especially in finite, perishable-inventory mediums such as TV, during marquee sports broadcast events,” Han said. “That could be a negative for the media sector, especially given how ‘recession-proof’ and dependable gambling advertising can be during softer economic conditions.”
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