This is pretty basic economics but apparently it needs spelling out…
Sponsorship deals go to the highest bidder. If the highest bidder is excluded from the process then the organisation that is looking for a sponsor will have to take the next highest bid, which will be lower.
The upshot of banning a whole industry from sponsoring football clubs, for example, is therefore that the football clubs will make less money from sponsorship.
With a week to go before the English Premier League resumes, that lesson is now being learned.
Heading into this summer, almost half of the teams in the Premier League found themselves confronting the same commercial headache.
Back in April 2023, all 20 member clubs collectively agreed to end front‑of‑shirt sponsorship deals with gambling firms from summer 2026.
… For years, gambling companies have underpinned the commercial reality of the league’s middle and lower tier, offering inflated sponsorship fees that other industries simply could not, or would not, match.
You can see where this is going…
“Collectively, the gap these clubs had to plug, as we worked it out, was around £80m,” said Mike Haywood, vice‑president at Octagon, one of the world’s largest sports sponsorship consultation firms. “There were between eight and 12 clubs that needed to plug that gap. Some of those clubs are still looking for long‑term solutions, while some of them are waiting for the market to heat up.”
Many football fans will find it hard to sympathise with the big beasts of the Premier League. I’m sure they will be alright in the end. But it is worth remembering that the anti-gambling lobby insists that companies are queuing up to sponsor teams and that football clubs can make the same amount of money being sponsored by more wholesome companies. You hear the same kind of thing from those who want to ban sponsorships and advertising of alcohol brands or so-called ‘junk food’ companies.
It is nonsense. When tobacco sponsorship was banned in snooker, for example, the number of tournaments dwindled to a handful and the amount of money in the game collapsed. It had to settle for the second best bids, which these days are often from gambling companies. If gambling sponsorship is banned, it will have to settle for the third best bid. And so on. Banning the top sponsors inevitably leads to less revenue.
The Premier League ban is “voluntary” because the people who run it thought that they were being clever trying to appease the government of a command capitalist economy.
“There is an element of tokenism with all of this,” explained football finance expert and author of The Price of Football, Kieran Maguire. “When the Premier League were lobbying against the Independent Football Regulator this was seen as something they could do to show that they could self‑govern appropriately. Now, in their eyes, they have the worst of both worlds with the IFR and no gambling income.”
Appeasement rarely works in the short term and never works in the long term.
Maybe they’ll increase ticket prices to make up the shortfall.
Hmmm. Ok, so you know this is coming from someone who agrees with most of your views and shares you opposition to most nanny state (or nanny big-nonstate-institution) stuff. Gambling advertising, at least as it currently exists, seems particularly noxious and deserving of throttling. Yes, I know, slippery slopes are real, but going from that to saying nothing should be fought is a mistake. Gambling ads (the ones I see in the US, I realize that may not generalize) are fundamentally deceptive. The universal theme (for obvious reasons) is people reliably raking in winnings, which is obviously flatly contrary to the business model. We know enough to know that this deception works on quite a few people who do not understand how things work. That is bad. It is equivalent to allowing cigarettes or quack "alternatives" to proper medicine to be advertised as health promoting. That is different from honest (or at least not actively dishonest) marketing that makes people aware of the products and touts their (real) benefits.
The policy you criticize is also different from government using police powers to completely ban advertising something (let alone the something itself). That should demand a very high bar. But someone deciding that this is a toxic element in society that they do not want to support, even if that means not getting to cash in themselves on the scam, seems rather laudable actually. This is not the equivalent of making everyone who drinks at a healthful level pay some penalty because a few people drink unhealthily (and perhaps not even affect the latter). Refusing to be a part of the advertising that is purpose-built to attract more people to lose what they cannot afford, because they are able to be misled into thinking winning is the most likely outcome for them, does not hurt people who get net positive entertainment value from their gambling expenditures. No one who has a thoughtful positive relationship with gambling is going to have any difficulty finding platforms without seeing many ads per day.
I have to say that I type some of those words only by forcing myself to include "even if" and "for those who" clauses to avoid presumption. I am a strong believer that some people can have a net positive experience from most any drug use or other freely chosen use of their resources. But I cannot get my personal head around someone wanting to sit around with just their mind and their phone feed money into a "house always wins" computer program (which is not the same as zero-sum bets among friends, or perhaps even spectacle gambling). If someone gave me $100 on the condition I immediately bet it online and could keep any winnings, I would do it, but I would find it an unpleasant experience. There are drug usages that cause me to say "why would anyone deliberately choose to experience this?" while I can still say "obviously some people like it because they choose to do it, so have fun with that." But I am not convinced online gambling deserves the latter consideration because it seems that most people are motivated by the irrational expectation that they will eventually turn a profit, despite this becoming vanishingly rare as their number of bets increases, and cultivating and then preying on irrationality is not ok.
Every time you post on the increasing inclination of the state, or other powerful institutions, to regulate what was the sole province of the individual citizen, it hearkens back to the holy war on the tobacco industry and its idealogues like Doll, Wynder, et al.