British Sports Sponsorships Put at Risk Due to Current Legal Issues

Numerous sports sponsorships in Britain face serious troubles as the current legal uncertainty remains in the balance.

Mobile betting firms that provide gambling services to UK but are based offshore have expressed strong concerns over the possible boundaries that they might face in the near future. The question has been raised whether offshore companies can continue their sponsorships agreement within the Premier League without having a proper license.

Despite many appeals from the legal representatives of betting firms that they should not have to obtain licenses for such pursuits, there still remains a decision to be made by government officials dealing with the case.

Premier League serves as great marketing platform

• Offshore companies face challenges with advertisement in Britain

• New regulations set to be put in place in regards to advertising and gambling

• Gambling Commission states there are no “advertising only” licenses

An attorney by the name of James Earl, from law firm Pinsent Masons, specializes in sports law. He argues that according to regulations, offshore betting providers don’t have to apply for licenses set by the Gambling Commission to strike sponsorships with English football clubs, as long as they don’t offer their service to UK residents.

“Commercial partnerships between Premier League clubs and global gaming and betting companies, such as the recently announced shirt sponsorship deal Hull City unveiled with 12BET, are becoming increasingly important sources of income for the clubs.”

He added that the Premier League serves as a great platform for companies to successfully develop a network which can have an extensive reach. The global reach and attraction of the Premier League represents an excellent opportunity for overseas gambling operators to gain exposure in markets outside Great Britain where they operate or are targeting future growth.

Earl also stated, “Premier League clubs, alongside the Premier League, have been working hard to open up new commercial markets, Asia being a prime example, and this includes making large investments in personnel and marketing strategies.”

Cutting off sponsorship deals pose financial risks

Earl argues that should the clubs from the Premier League lack compliance practices in regards to regulations, then the offshore operators might starts looking elsewhere to invest their money. This would jeopardize revenue income that comes from those firms.

“However, if Premier League clubs or other sports teams cannot provide prospective partners like overseas gambling operators with certainty about compliance with the local regulatory landscape in Britain, then those rapidly growing and lucrative revenue streams for clubs, alongside the substantial investments they have made, will be put at risk.”

The prominent sports law specialist commented that advertising of gambling services falls under the umbrella of the UK gambling laws and that they should be considered with great efforts. Without effective measures in place to deal with the current issue, clubs would stand to lose out a great deal.

“That regulatory landscape includes the advertising of gambling services, and the position the Gambling Commission has taken on the issue and how it concerns overseas-based operators has the potential to negatively impact British sports clubs' income without a justified reason for doing so.”

Gambling Commission regulations

The Gambling Commission gave indications that even when offshore firms restrict UK residents’ access to the gaming sites, the providers may still be breaching regulations in terms of sponsorships. The Revised Gambling Act states that firms that showcase advertisements in the UK but do not have a license in the country are in fact committing an offence.

Gambling regulations are changing to focus more on the present location of the customer, instead of the location of the supplier of the gambling provisions. Gambling news reports that the new law is intended to come into force on October 1, 2014 which are part of official changes to the Gambling Act of the Gambling (Licensing and Advertising) Act.

The Gambling Commission recently issued a statement whereby they claim that overseas companies will be able to receive licenses for advertising in the UK only if they provide gambling services to British punters as well.

“The Commission has received enquiries about the possibility of an ‘advertising only’ licence, i.e a licence to permit overseas operators to advertise to those in overseas markets by means, for example, of sports sponsorship or advertisements on the perimeters of sports fields but not accept transactions from British consumers.”

The statement also said, “The Commission will not normally license such operators unless they have a British facing business and either currently transact with British consumers or have a clear business plan for doing so in the future.”