The Real World Cup Winner? Online Gambling.
(Bloomberg Opinion) -- The longer England captain Harry Kane and his team stay in the World Cup, the bigger the boost to the U.K. economy. But if there's one industry that stands to win whatever happens, it's betting.
Brits are set to wager an estimated 2.5 billion pounds ($3.31 billion) on the World Cup, according to data published by the London Times, or a 50-percent increase on the previous tournament. That number is almost exactly the sum fans are estimated to spend on food, drink, merchandise, pubs, clubs and cafes combined — if England were to win.
The boom should give pause for thought, not least because 2 million people in the U.K. are deemed at risk of becoming problem gamblers. Curbing advertising, without cracking down on betting platforms, is a good way to nudge consumers while still leaving their choice intact.
The spread of technology and decades of fairly permissive regulation, with betting shops a common sight on British streets since the 1960s, have laid the groundwork. The U.K.'s online gambling market is the biggest in Europe, with gross revenues of $5.7 billion, according to consultancy GBGC. Markets like France are catching up, but keep the sector on a much tighter leash.
Yet advertising and marketing really keep the wheels turning. The tens of millions of U.K. viewers tuning in for a World Cup match regularly come face-to-face with a celebrity cheerfully promoting online bets, somewhere in between the teams' national anthems and the start of play. It's hard to reconcile the glossy scenes of groups of friends laying down victorious bets between swigs of beer with reality.
The ads are the logical conclusion of a deregulation drive that began a decade ago, and which led to ads so in-your-face that some politicians and the Church of England have called for further restrictions. Sponsorship deals between clubs and betting brands have soared.
Rules and standards are belatedly being tightened, notably around the tone and seductive financial promotions of some ads. But the ubiquity of ads and aggressive messaging remain unchanged. Betting websites' impressive double-digit operating margins alone should make clear who the real winners are.
Industry bodies have in the past argued that opposition to ads is emotional rather than evidence-based. Dr. Mark Griffiths, of Nottingham Trent University's gaming research unit, found otherwise. According to his research, normalization of sports betting could hurt vulnerable sections of society: Some 70 percent of children have seen gambling ads on social media, according to the Gambling Commission; and problem gamblers mention advertising as a trigger.
A direct crackdown on online gambling is probably more paternalistic than U.K. society would support; it would also just fuel a black market. But consumers would benefit from a nudge in the right direction. Advertising and awareness campaigns about the risks of gambling could balance the scales a little better. A proposal from Bournemouth University's Raian Ali suggests re-routing the data harvested by gambling platforms back to the consumer, so gamblers can see the full record of their activity and money spent (and lost).
These measures would make a great deal of sense. But future regulatory efforts should still target the marketing machine of an increasingly volume-driven and commoditized betting market. A reduction or ban in betting ads would no doubt help with gambling addiction. But, as with alcohol and cigarette advertising, where heavy restrictions now apply in the U.K., firms are unlikely to hold back voluntarily. Betting on less exposure could pay out for society over the long run.
©2018 Bloomberg L.P.