UK gambling sites agree to TV ad blackout during soccer matches
- Voluntary deal reached to stop showing betting adverts during live soccer broadcasts.
- Major bookmakers, including Paddy Power and Ladbrokes spend between up to £50 ($63.7 million) million on television advertising per year.
- Television advertising helped the U.K. gambling industry see £5.35bn ($6.82 billion) wagered online during in 2017.
Britain's biggest gambling firms have voluntarily agreed to a TV ad blackout running from "whistle-to-whistle" during soccer matches.
The Remote Gambling Association (RGA), an industry lobby group whose members include bookmaker's William Hill, Paddy Power and Ladbrokes, will agree to stop the ads during live broadcasts, which have become commonplace across English soccer.
No formal announcement from the RGA has been made, but it is looking to confirm the move early next year.
"We made a number of proposals which are being considered by the members of the Industry Group for Responsible Gambling." Clive Hawkswood, the chief executive of the RGA, told CNBC. "We are of course hopeful that IGRG will agree changes to the Code, but that process has not been completed yet."
Anti-gambling campaigners and politicians have voiced concerns about the volume of bookmaker's adverts on TV and how it potentially glamorizes gambling.
U.K. Secretary of State for Digital, Culture, Media and Sport, Jeremy Wright, said via social media Thursday it was a "welcome move."
"Gambling firms banning advertising on TV during live sport is a welcome move and I am pleased that the sector is stepping up and responding to public concerns," he said.
Over half of the soccer teams in England's top two leagues in England currently have gambling sites as their main shirt sponsor and the increasing influence of these companies has grown relatively unchecked in recent years.
"Investors in U.K. gambling stocks may be worried about another regulatory measure in the shape of a proposed ban on advertising during live sports events, but the effect on earnings should be modest," said Irish wealth management company Davy Research.
The brokerage says FTSE 100 companies Paddy Power Betfair and GVC Holdings, which owns big betting firms Ladbrokes and Coral, both spend between £40 million ($51 million) and £50 million annually on British TV advertising, some of which may now be redeployed.
Davy said the returns on TV advertising are modest and the change won't materially affect earnings forecasts. On Thursday, GVC shares closed 5.6 percent lower, Paddy Power Betfair down 2.8 percent and William Hill registered a near seven-year low.
"However, it is a necessary development, in our view, and nudges the sector towards a more sustainable footing." Davy went on to say.
Bet365, which sponsor the shirt and stadium of Stoke City, has become one of the most prevalent advertisers on British TV, using BAFTA-nominated actor Ray Winstone to promote its in in-play advertising on TV. It's owned by Peter and Denise Coates and recently logged profits of £660 million in its latest accounts.
Television advertising helped the U.K. gambling industry see £5.35 billion wagered online during 2017, according to the Gambling Commission. That's compared to the £5.55 billion spent in betting shops, casinos, arcades and bingo halls combined.