View from the City: Will a voluntary TV and radio ad ban impact operator finances?

April is normally a month when the betting industry is focused on the Grand National but, due to the Covid-19 induced cancellation, it was the Virtual Grand National that took centre stage this year and to the benefit of £2.6m for the NHS. The industry’s renewed focus on responsible gambling has been accelerating ever since, culminating in the announcement by the Betting and Gaming Council towards the end of the month that its members – which represent 90% of operators in the UK – will stop TV and radio advertising from 7 May until 5 June. Slots that cannot be returned to the broadcasters will instead host responsible gambling messages or be given over to charities. It’s a sensible move, prompted by Gamesys making the voluntary step earlier in the month, but the next battleground will be digital advertising which was reportedly around five times the size for the gambling sector last year.

What will be fascinating will be the impact or otherwise on the companies’ P&Ls. There has long been the suspicion that much of the above-the-line marketing spend is more a vanity spend than helping reinforce brand awareness. Of course, with the global sporting calendar currently on ice, there should be little theoretical downside for the betting companies. Indeed, with there being increasing hope the English Premier League will restart on 8 June, it is no surprise to see the voluntary ban is mooted to end just before this date.

The other noticeable events last month were the shareholder approvals granted for the DraftKings combination with SBTech and Diamond Eagle Acquisition Company – with the enlarged group listing on Nasdaq with a market cap of around $6.1bn. There were also approvals by Flutter Entertainment and Stars Group shareholders for their combination, which should complete in May, creating an industry-leading behemoth with a market cap of around £13bn.