Credit: Kai Pilger via Unsplash
Television, especially sports broadcasts, would be hit hard and other media platforms would also suffer from the ban on gambling advertising, which is widely viewed by viewers as a pervasive and unwanted stream of noise.
a parliamentary consultation recommendation to ban gambling advertising for three years sparked strong protests from sectors of the media and gaming platforms.
The Australian commercial radio industry says radio has been wronged and Free TV says the investigation is taking a "extreme approach".
Online bookmakers, represented by Responsible Wagering Australia, say blanket bans are ineffective in stopping problem gamblers who simply resort to illegal offshore markets.
However, the chairman of the parliamentary committee, Labor MP Peta Murphy, says the torrent of publicity is inescapable.
“You're manipulating an impressionable and vulnerable audience to gamble online,” she says.
"Australia's largest professional sports codes and broadcast outlets were largely in step with their advertising and sponsorship partners in the gaming industry during this investigation to oppose further restrictions."
In the advertising industry, linear TV is already under pressure, seeing substantial drops in ad spending following a post-pandemic lockdown hit.
Both Seven West Media and Nine Entertainment have identified a weaker market this year.
And the demise of betting advertising would have a significant impact on both ASX-listed media groups.
Analysts estimate that gambling ads account for about 6%, or $180 million, of TV advertising revenue of $3.2 billion.
Gambling advertising in Australia has grown at around 13% CAGR over the past 15 years, rising to $300m in 2022 from $53m in 2007, according to analysis by investment bank Morgan Stanley.
It is estimated that between 50% and 60% of this was allocated to open television, 20% to digital, 10% to radio, 5% to exteriors and the rest to press and cinema.
“Sports betting/betting-related advertising has been a huge growth category for Australian media companies over the past decade,” Morgan Stanley analysts wrote in a note to clients:
"As such, any reduction in advertising spending is likely to have negative consequences for television broadcasters."
Media analyst Steve Allen, Pearman's director of strategy and research, says an immediate ban would wipe out half of TV's profitability.
“Most of the media would be affected,” he says.
“Worse yet, this move would make many of Sports Telecast's long-term rights uneconomical.
“There would be a very big impact for the main sports organizations. I think it would signal the spike in prices for sports broadcasting rights."
Morgan Stanley has not changed its base-case earnings estimates or valuations for Nine and Seven.
"What we do know, having observed similar changes in advertising regulation in the past...is that removing betting advertising spend is unlikely to result in a 100% loss of those targeted revenues." analysts say.
"Ad space surrounding and during top-tier sports and sports-related broadcasts are premium space that will be in demand by other types of advertisers."
Whether or not that inventory can be sold at the same premium is the big question,
However, there are many in the advertising industry who oppose the exploitation of the vulnerable.
Joel Trethowan, managing director of independent media agency Alchemy One, says it's crucial to step back from industry concerns about lost revenue and the characterization of this move as extreme, to understand the broader social responsibility of the media industry.
“Gambling ads have gone mainstream across various media platforms, normalizing and promoting an industry that profits from people's vulnerability,” he says.
“The negative impact of gambling on individuals and families cannot be overlooked. Addiction, financial ruin, and psychological distress are just some of the consequences faced by those affected.
“By implementing this proposed ban, the government would be sending a powerful message that the media should not perpetuate an industry that thrives on the exploitation of the vulnerable.
“The proposed three-year phase-out is an incredibly fair proposition. It would be a sensible and welcome approach to finally make some moves towards regulating gambling advertising and the impact it has had on the people of Australia.
“Calling the new measures 'extreme' is almost laughable, given that Australia's online gambling ads are 20% higher than any other nation. What we have tolerated and allowed as an industry to date is extreme.
“It is important to remember that this recommendation is only the first step towards implementation at the government level. The battle has only just begun, and we can anticipate immense pressure from sports codes and media platforms to prevent this from happening. Now is the time for us to remain vocal and resist.
“We must continue to push our elected officials and advocate for the importance of this ban. Think about how the industry has approached cigarette advertising: It's done it before, and it can do it again. People first, profits second."
Adrian Roeling, Managing Partner of Hatched, as a father, is a big fan of more regulation of game advertising.
"I would be particularly happy to see more regulation on channels like TikTok, where children are at risk of increased exposure to gambling advertising," he says.
"Years ago, Hatched made a conscious decision to decline any invitation to enter the gaming business after consulting with our staff.
“However, a blanket ban on all game advertising feels like a heavy-handed and somewhat blunt approach.
The growth of gambling advertising:
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