Culture secretary James Purnell will face the first major test in his short ministerial career at the start of next month. He will throw open the floodgates on a new era of marketing on September 1 when ads for gambling will be allowed on television and radio for the first time, in line with the Gambling Act 2005.
The gambling industry feared that Purnell – appointed by Prime Minister Gordon Brown in June with gambling regulation a key part of his brief – would reverse this element of the Act under pressure from the puritanical Scot. But a last-minute deal was struck with the industry last week and a code of practice has been agreed to ensure the ads will be socially responsible, not appeal to children and not encourage irresponsible play.
First breakers on the horizon
So gambling brands are pressing ahead with their marketing plans and a wave of betting ads are about to hit the UK’s airways amid predictions that marketers will take the opportunity to drive an unprecedented growth in gambling.
Brands such as online operators Partygaming.com and Betfair, and betting chain The Tote have declared they will take the plunge into TV advertising, contributing to an ad onslaught estimated to be worth between £50m and £100m a year.
However, Purnell has found himself immersed in further chaos in the run-up to the introduction of the Act. Last week the Institute of Practitioners in Advertising pointed out that national advertising campaigns would only be possible on ITV1 because it is the only broadcaster able to prevent broadcast in Northern Ireland and the Channel Islands where the Gambling Act 2005 has yet to be adopted.
Minor glitches aside, the deregulation of betting ads faces fierce opposition from lobbyists horrified at the prospect that the UK may be transformed into a version of Las Vegas with rain and warm beer. Some fear a scenario where consumers can see an ad on TV and are able to respond immediately by logging on and betting online.
Purnell has the power to pull the plug on ads if evidence emerges that they are fuelling addictive or anti-social behaviour. All eyes in the gambling industry are on the Government’s youngest minister. Which way will he jump? In reality, much will depend on how the gambling brands behave and how far they live up to the guidelines they hammered out with Purnell.
One participant says negotiations with the Department of Culture, Media and Sport were “horrendously painful” and not everyone is happy with the result. Ads will only be shown after the 9pm watershed apart from during sporting events. Content is forbidden to suggest gambling will enhance sex appeal or bank balances, and a body drawn from gambling industry members has been formed to monitor the voluntary code.
Ads must contain a reference to a website that offers advice on sensible gambling and it is also suggested they carry a strapline such as “Winners know when to stop”, though some say this is a bit like telling a heroin addict to “Just Say No”.
Sports bookmakers are likely to take advantage of the provision for pre-watershed advertising that is to be allowed around sporting events – though the code is careful to point out that sporting events do not include celebrity ice dancing competitions and the like.
Partygaming.com director of communications John Shepherd says: “It is a safe bet that there will be quite a number of ads after September 1 from the online sector.”
Shepherd says that more than 50% of the marketing mix for Partygaming’s brands such as Party-poker.com, Partycasino.com and Partybingo.com, is spent online. TV ads already play a part in its activity in other markets and the UK can “expect” to see commercials here.
Betfair has already booked airtime (MW last week) and The Tote has withdrawn early from its sponsorship of Channel 4 Racing with the specific purpose of switching its marketing budget to TV commercials. William Hill says it will “consider television very closely” and until a baseline is established – a stance taken by many operators. Many firms are waiting to see what their competitors do before committing themselves.
The industry already spends significant sums on advertising, predominately in press, outdoor and latterly online but broadcast offers fresh opportunities for growth.
Barni Evans, marketing director of bookies chain Paddy Power, says: “Until now, gambling advertising has largely been tactical, for example, introductory offers such as ‘Here’s a free £50 bet, join us in the bookies now’. This kind of advertising will never create long-term brand predisposition.”
But the constraints on broadcast advertising will not allow advertisers to be so aggressively tactical, he believes. Evans suspects this will force the ads to be more creative in the way tobacco ads became after people were banned from appearing in them in the mid-1980s. Memorable work was created for brands such as Benson & Hedges and Silk Cut.
According to Betfair brand director Oscar Nieboer the watershed rule for gambling ads will lead to price inflation as companies scramble for spots between 9pm and 11pm. “In an environment of limited inventory, advertisers will be forced into a corner by a fudge that creates media inefficiencies, which will undoubtedly force advertisers to be more aggressive in their messages and tactics, the last thing the Government wants,“ he says.
The dilemma for gambling brands is whether to use a softly-softly approach and position themselves as responsible in an attempt to build trust, or to produce ads that exploit grey areas in the code before Purnell pulls the plug on advertising altogether.
Purnell’s hardline approach was demonstrated last week when he announced a crackdown on gambling websites based in foreign countries. This move was seen by many as little more than political posturing because many of the relevant companies had already shifted registration to countries that have Government approval.
Brinsley Dresden, a partner at legal firm Lewis Silkin, says: “Whatever its shortcomings, the gambling industry has a right to expect at least some degree of certainty about the parameters in which it must operate for the next year at least.”
It remains to be seen whether the doom-laden predictions of an explosion in gambling culture in Britain will come true. But from September gambling brands will have an opportunity to show they can be responsible members of the leisure industry. They need to show that gambling can be simple, harmless fun rather than a path to ruin. TV advertising should be ideally suited to the task.