A recent post discussed the American Gaming Association’s self-imposed prohibition on “college partnerships” and the financial implications for schools that have or are considering agreements with sports betting companies.
Restricting who can sponsor, or conversely what can be sponsored, is not a new phenomenon. In the U.S., cigarettes and other products have been out of the sponsorship business for a quarter century as a requirement of the $368.5 billion settlement between the tobacco industry and 40 state attorneys general. Many other western countries have similar restrictions.
Spain and Italy prohibit sports sponsorship by gambling companies, Belgium is set to introduce a similar measure in 2025 and the Netherlands is considering its own ban. With the U.K. government threatening to restrict betting sponsorship, English Premier League clubs are likely to pre-emptively approve a ban on jersey-front sponsorship this summer.
Over the years, other prohibitions have been suggested for categories such as alcohol and “junk” food, including fast food, salty snacks, confections and soft drinks. During the 2008-09 financial crisis and subsequent government bailout effort, then U.S. senator John Kerry introduced legislation that would have prohibited financial institutions that received federal TARP funds from sponsoring. Kerry labeled sponsorship an “idiotic abuse of taxpayer money.” The bill did not pass.
There is no question that there are individual and societal problems with legal products associated with gambling, smoking, drinking and the consumption of unhealthy food and beverages. Not wanting to outlaw those products, many countries have chosen to address those problems by imposing taxes on the sale of such products and curbing their ability to market themselves.
But selective marketing bans don’t stop the message, they only reroute it to different channels. For example, according to the nonprofit Tobacco Free Kids, the industry spent $8.6 billion marketing its products in the U.S. in 2021, compared to $6.9 billion in the first year of the Master Settlement Agreement that stopped most forms of advertising and promotion in 1998.
In the case of the AGA eliminating partnerships with colleges and universities, the ban will merely eliminate official promotions on campus and in stadiums and arenas. Sports betting firms will still be able to advertise to students, alumni and other fans during game broadcasts, co-branded shoulder programming and social media content, etc.
The only entities that lose out in that scenario are the schools (and their multi-media rights partners). While there are many restrictions on gambling advertising that make sense—such as the AGA’s ban on using the term “risk free”—diverting funds away from rightsholders does not.