Banning betting companies from sport sponsorship will create a huge void that may never be filled
A few months ago, football club Swansea City announced its university namesake as its new shirt sponsor and thereby broke ties with a betting company.
They may be just the first of many football clubs to break away from gambling and, like Swansea City, they will take a financial hit from the switch.
This year’s report from the All Party Parliamentary Gambling Related Harm Group suggests eradicating all betting companies from sport sponsorships by the end of 2023. A review launched this week will consider the move.
It would seriously affect all sports but most notably football as 17 of the 24 Championship clubs currently have betting companies on their shirts.
Owing to the pandemic the timing could not be worse, as getting other brands to sign on the dotted line will be a much harder task.
The Premier and Football League clubs may plead for more time, bearing in mind the financial calamity that Covid-19 has wrought, but it will likely be futile in the end.
What football can learn from F1
When tobacco companies were banned from sponsorship in the early 2000s the market was very fearful of how it could replace the hundreds of millions of dollars they invested in sport, most notably in Formula 1.
As we now know, F1 was able to reposition itself and now has a raft of global brands.
For those sports only operating in the UK, the challenge to replace betting sponsorship revenue will be immense.
Betting companies spend over £100m per season with the Premier League and EFL. When you include other sports, that figure doubles at least.
Horse racing, boxing and darts are obvious examples which will have to work much harder to attract a new commercial audience.
Like F1, football clubs will have to present themselves in a different way to attract brand interest.
My gut feeling is that clubs outside the Premier League will become more focused on targeting brands and businesses that are located within their catchment area and strongly link the association with community initiatives.
The effects of this year mean that people will spend more time than ever in their local area. They may work from home more and thereby have a deeper engagement with their local community.
For instance, football clubs could run programmes in local schools that teach boys and girls athleticism and co-ordination, which are skills for life not just sport, and attract a local brand to partner them alongside the local council.
The local football club is often seen as a beacon within a community. Why not broaden the offering to physical wellbeing as well as football schools and camps?
The challenge for betting brands
It is also as much of a challenge for the betting brands as it is for the rights holders.
How are they going to replace their current exposure in what is a massively competitive market?
Will they spend as much, and will they just focus on social media and digital exposure directly to existing punters as well as trying to lure the new ones in?
Marketing directors will be looking for exceptional creativity and innovation in order to reach their audience and capture their data.
It will be a huge hole that sport will need more than a few years to fill and I doubt it will ever be totally replaced.
Furthermore, if the government does bring betting into line with tobacco, it begs another difficult question.
Will politicians demand the same for alcohol brands to complete the hat trick? In the meantime, the race is on.
Jamie Salmon is a former international rugby player and is executive business consultant at global sports marketing agency rEvolution.