- Betting companies have helped shirt sponsorship values to nearly double for some clubs
- Intermediaries are crucial in establishing connections between clubs and emerging brands in a fragmented sector
- Tech-savvy betting industry could set the benchmark for future creative digital activations
The English Premier League was 10 years old when Fulham became the first club to sign a shirt sponsorship deal with a betting company, for the 2002-03 campaign. But what was once a quirk has become the norm.
This season, nine of the Premier League’s 20 clubs and 17 of the 24 clubs in the second-tier Championship have a gambling operator’s logo on their shirts. Other clubs have less conspicuous betting partners that are granted exclusivity at stadia and receive privileged branding exposure on perimeter advertising boards or via digital, marketing and communications platforms.
This growth has coincided with the explosion of online betting and gaming and, from the perspective of many clubs, the money on offer from betting brands has been impossible to ignore.
Few industries are growing worldwide like online betting and gaming, although the sector remains fragmented and turbulent due to regulatory differences from country to country and, in places like the US, Germany and Australia, from state to state.
A new report in March 2019 by Zion Market Research projected the value of the global online gambling and betting market to increase from $45.8bn (€40.6bn) in 2017 to $94.4bn in 2024, expanding at a compound annual growth rate of 10.9 per cent over seven years.
From the perspective of English football clubs seeking sponsors from the gambling sector, it has been a buyer’s market for three main reasons.
Firstly, there is the obvious pulling power of English football, and especially the Premier League, which has passionate pockets of support across the world, providing opportunities for brands to connect with consumers in regions like Southeast Asia, for example, and not just the UK.
Secondly, there has been a shift towards consolidation in betting and gaming through frantic M&A activity over the past three years. Start-ups that have been successful in securing the necessary seed funding from speculative investors have embarked on aggressive marketing campaigns to secure vital market share that will sustain their business.
Thirdly, gambling companies operating in the UK have for many years faced less stringent regulations than in many other countries. Since the introduction of the 2005 Gambling Act, which allowed domestic and offshore gambling companies to advertise on UK television, operators have viewed the country as a fertile market for multi-channel campaigns and growth.
With fewer restrictions than other markets and a relatively stable regulatory outlook, the UK has therefore positioned itself as an appealing outpost for internationally-facing operators – and its football clubs have benefited as a result.
Betting companies account for none of the six most lucrative shirt sponsorships in the Premier League, although the biggest clubs all have betting partners, such as Manchester United with MoPlay, Manchester City with Marathonbet and Liverpool with BetVictor.
It is in the middle- to lower-ranking clubs in the top division where gambling companies are a dominant presence on the kits.
West Ham United’s reported £10m (€11.6m/$13.1m) per season agreement with Betway is the most valuable of the betting-related shirt sponsorships, while the remaining deals have an average value of about £4.8m per season.
Clubs have boosted their bank balances by embracing the betting sector.
For example, by shifting to SportPesa in 2017, Everton almost doubled the value of its shirt front rights, from £5.3m to about £8m. Newcastle United’s switch from a payday loans company to Fun88 in the same year increased the value of its shirt front.
“There is a lot of money in betting and I think the betting industry has really discovered over the last 10 to 15 years the power of having a significant presence in sport,” says Jaap Kalma, the current interim business development director at Sports Betting Community and a former chief commercial officer at AC Milan.
“Betting is more relevant to sport than any other sponsorship category. If you are betting on sport, the relationship with the ‘product’ is more intimate.
“The relevance of betting to sport provides the opportunity to tap into ‘fandom’, which is such a powerful emotion and rich for activation. I really think that as a whole we are only scratching the surface at what can be done in fan engagement.”
Opportunity or threat?
Tapping into the emotional connection between a fan and his or her team is an incredibly appealing proposition for any sponsor and club.
But some argue also that with the betting industry, it can also be incredibly dangerous.
The most pressing concern is not the long-held suggestion from some that mainstream bookmakers can open the door to match-fixing. After all, registered, taxed and sometimes listed betting companies report suspicious activities as a matter of course and, aside from some isolated and high-profile incidents, it is in the unregulated sector where such dangers flourish.
It is the increasing recognition of problem gambling as a major societal issue that has led to heightened scrutiny of the sector from regulators and lawmakers – and it is something that clubs must consider when they are exploring whether to endorse a brand that may have fed such addictions.
The mood music appears to have changed about two years ago, when England’s Football Association curtailed a £3.5m-per-year sponsorship deal with Ladbrokes Coral just 12 months into a four-year contract following concerns about the gambling industry’s influence over the sport.
Since then, UK regulators have been clamping down with increasing regularity on betting operators and brands in areas such as customer service, operations and advertising.
Like any industry under such a spotlight, failing to apply affirmative action from within can lead to surrendering control to external forces.
The tobacco industry provides an apt precedent. After years of half-hearted attempts to self-regulate, tobacco sponsorships were effectively erased from professional sport by the introduction of the 2003 Tobacco Advertising and Promotion Act.
Comparably cutthroat actions are possible in betting too. Last summer, Italy’s government introduced legislation to outlaw betting promotions and advertising, throwing long-term commercial partnerships between football clubs and operators into turmoil and costing Italian sports teams and leagues a cumulative total of about €120m per year.
Under increasing political pressure in the UK, some of the bigger operators, including bet365, GVC and William Hill, agreed in December to a voluntary whistle-to-whistle ban on betting adverts during sports broadcasts on television from this summer.
Further curbs are inevitable, although clubs can play a proactive role in shaping the expectations of the decision-makers.
“Maybe there is a point where it [gambling exposure] would become too much. It would make sense at that point for the industry to prevent a backlash and avoid over-exposure,” Kalma says.
“With betting sponsorships, clubs can mitigate issues with integrity programmes involving their players and of course they should ask their betting partners to promote responsible gambling in their messages and activations.”
To avoid reputational damage by association, detailed due diligence by clubs is essential. “Do they play by the regulatory rules? Are they constantly fighting with regulators? Are they a reliable outfit? These are just some of the questions that need to be asked,” Kalma says, before adding that the process itself does not vary greatly from background checks on potential partners from other sectors.
With an industry as fragmented as gambling though, middle men who can make the necessary introductions are vital.
Mark Davies, the global head of partnerships and sales at Swansea City, which was relegated from the English Premier League last season, says: “Gambling operators tend to work closely with marketing agencies, so that adds a level of trust, security and credibility even before we begin conversations.
“If a betting operator we might not be familiar with is introduced to us by a major agency such as Lagardère, CSM, Pitch or SportQuake, that would reassure the finance and legal teams more than an unknown brand entering the space on its own. I’m sure a new betting brand coming from a non-traditional market would add another layer or two to the due diligence process.”
Kalma explains that clubs tend to talk to “two or three potential partners who they may know or who have been presented to them by various intermediaries”.
He adds: “There are only a few large sports marketing agencies that structured – and expensive – and then a lot of small ones with one person or a few people who fill a gap.
“Often people who happen to know a brand and some clubs, without having great experience or market knowledge, then make a buck creating the connection. That’s how things tend to go, especially as clubs won’t have the staff with the knowledge or access to the brands.”
Many of the betting brands adorning shirts in English football are not only based overseas, but are also dedicated to an overseas market, rather than the UK.
“It’s no secret that a lot of Asian brands want to get into bed with Premier League teams, because of the ban on betting advertising in their own countries,” Davies says.
According to Kalma, such an approach can be beneficial from a club’s viewpoint.
“These deals are not creating over-exposure in the club’s home market,” he says. “Therefore, it’s good for the sponsorship inventory as the rights available for other sponsors are less depleted, plus you can activate in different markets.”
Activations between clubs and betting partners have been experimental and, at times, risky, illustrating the creative nature of the online gambling industry.
“Some 10 years ago activations would have been very basic and, you might argue, cynical. Now it’s different,” Davies says. “There is a focus more on content provision from articles to videos and social media. This allows for a softer relationship between the club, the brand and the public.”
Davies highlights how Swansea’s former sponsor, Asian betting operator Letou, arranged for first-team players to have a dumpling cooking lesson and then shared the footage on social platforms. “It was very popular as it showed our players and club reaching out to Asian football fans,” he says.
Swansea leveraged the partnership to gain vital overseas market knowledge and the club set up a profile on Chinese social networking website Weibo to gain new followers as a result.
“In terms of activation, of course the main thing is the exposure on the front of the shirt, but there are other promotions such as, for example, the Player of the Month award,” Davies says.
“Our current sponsor, Bet UK, is very big on responsible gambling. So, in contrast to a few years ago, our partnership with them allows us to promote a social responsibility message about betting. This is also true with Sky Bet, which is the partner of the English Football League.”
Kalma believes the activations will only become more sophisticated as the betting and football industries strengthen their ties and explore digital innovations, which lie at the heart of the future of online gambling.
“The messages will move away from brand exposure and awareness over to loyalty and relationship-building with fans,” he says. “The digital transformation will play a big role in terms of affecting all sponsorship rights and visibility. Betting is a leading category in the digital transformation.
“The activations and campaigns will be more positive and more about the fans. I don’t know if the football betting sponsorship market will necessarily get bigger in terms of the number of partnerships, but I think the quality will improve, and that will drive value.”
Jaap Kalma and Mark Davies will speak at Sports Betting Community’s Betting on Football 2019 trade conference, which will bring together decision-makers from international operators and clubs from March 19-22 at Stamford Bridge, London. Visit https://sbcevents.com/betting-on-football-2019/ for more information.