Game over? Sport sponsorship and the Dutch gambling crackdown
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Hello, this is Business Daily from the BBC World Service. I'm Matthew Kenyon in the Netherlands, looking at a massive change here in the rules governing online gambling. From July onwards, there will be a complete ban on advertisements in the sports world.

And everywhere. That's a dramatic reversal in policy from just four years ago when the market was first regulated, unleashing a flood of advertising and sponsorship, especially in sport. Some of those betting companies, they hired marketing agencies who just had to put away a lot of money. The business will remain perfectly legal, but the flow of cash from gambling sponsors to sport...

is about to come to an end. It's not a healthy situation to fully open a market and make clubs somewhat dependent and then fully close it. How will sport and the betting operators adapt to a world where most online gambling advertising is no longer allowed? That's Business Daily from the BBC.

I'm on the outskirts of the Dutch city of The Hague, next to the junction of the A4 and A12 motorways. It's one of the busiest stretches of road in the country, and everyone driving past gets an excellent view of the building in front of me. Picked out against the skyline in huge lettering is its name, Bingoelstadion.

It's the home of Addo Den Haag Football Club, which for the last three years has been sponsored by one of the major online gambling companies that operate here in the Netherlands. But from the 1st of July this year, there will be a new name in that prominent position and all references to Bingo's sponsorship of Addo Den Haag will disappear from public view.

And that pattern is going to be repeated across the country as perfectly legal online betting companies who in the last few years have spent millions of euros on sponsorship deals across sport are forced largely out of the public eye. It's the conclusion of a rapidly changing process which began when online gambling was first regulated in the Netherlands in October 2021, unleashing marketing campaigns which took people very much by surprise.

We got a flood, a bombardment of advertisements everywhere. Michel Groothuizen is the head of the Dutch gambling regulator, the KSA. Whether it was on television or on bus stops or billboards or whatsoever in the public area, and it really...

created a kind of stir among politicians as well as among the general public because no one knew what had happened up to that moment gambling apart from lotteries etc but was forbidden in the Netherlands so

It was very unexpected for most people to see so much advertisements. And all these commercials and other things were shocking people.

There's an obvious link between sport and gambling, and when the market opened, the sector was transformed by a flood of sponsorship. Brand names on shirts, pitch side hoardings, stadium naming rights and much more. There were plenty of open doors as gambling companies tried to secure a slice of

what became a billion euro regulated market. Michel Everaert is the general secretary of the Dutch Volleyball Federation. Some of those betting companies, they hired marketing agencies who just had to put away a lot of money. They were afraid to miss market share, to miss eyeballs. So there were really huge budgets and they were...

almost bidding on every property. So you went there, you got a lot more money than you would have had in the past. They were not so much looking at short-term revenues, was my feeling. I think there were big investors behind it, thinking, okay, we have to get people to our website because if they bet through our website, they're going to probably do it for years.

That's the way it felt. There was basically serious money coming into those leagues. Volleyball secured the backing of Bet City, another Dutch brand, for its top-flight men's league. And many other sports and leagues did similar deals with different companies. But almost as quickly as they were relaxed...

The rules governing gambling advertising began to be restricted again after a political and public backlash. Dutch gambling regulator Michel Groothuizen. I must say that the relationship between the gambling industry and Dutch politics has worsened during the last years. We have tried...

all the time to be not only on speaking terms with the industry, but to warn them and to steer their behavior without hard rules,

But that turned out to be in this field. We also have fields where it went better. But when we speak about commercials, about advertisements, that was too difficult for them to agree upon.

Essentially, when the market opened up, they needed to grab as much of it as possible. And the most direct way of doing that is to pour as much as they can into advertising. You're obviously not speaking for them, but that's your interpretation of it. Absolutely, yes. And that's maybe imaginable, but that was not acceptable. My name is Bas Raamakers.

I'm the CCO for the Eredivisie, which is the league organisation for the Dutch top-tier football league. Which means he represents clubs like Ajax, Feyenoord and PSV Eindhoven, the giants of the game here. But also much smaller set-ups, such as Heracles Almelo, Peksvoller or Fortuna Sittard. There has never been an option for us and for the clubs to work with betting companies...

Then the market was fully opened and in the competitive environment that we are in, we know, and that's not only football, that's also media, that's also out-of-home advertising, that's simply what happens when new money is available in the market. And without any regulation, it's not a healthy situation to fully open a market and make clubs somewhat dependent and then fully close it. It would have been better to open it already with restrictions,

And because that would have been a small plus, now there is a big plus, but then also a big minus. Estimates of how much betting money has gone into football in the last years vary. Bas Ramakers gives a figure of 40 million euros a year, which is a lot.

Which is why Dutch football proposed a system of self-regulation to limit the visibility of betting sponsorship when it became clear a crackdown was on the way. We came to a plan that we also share with politics to avoid too much betting sponsoring in football. So we were willing, with all the clubs, as a league, as the FA,

to ban front of shirt sponsoring, to limit the exposure that you could see around matches. So no only betting advertising on the LED boarding, for instance. But we were willing to limit that to make it quite strict for ourselves. And what became of that plan? In October 21, the law was in place, was effected. The basic idea was to have an evaluation after three years, but already after six months...

a ban was introduced. So even... Well, we shared the highlights of the plan. But before we were taken serious or we could have a serious conversation about the plan, the ban was already there. So...

Yeah, that's the situation that we are now facing. The impact is not just on individual clubs, rich or poor, large or small. The new regulations also add to the difficulties faced by Dutch football as a whole as it competes for players and investment with its peers around Europe, many of whom aren't so shy at encouraging online gambling sponsorship.

If you look at one of the main targets that we have as a league, supported by all clubs, is that we want to be a top six competition in Europe. We are in close competition, especially with Portugal and Belgium. We want to be in competition with France.

And if you connect that to betting advertising, then you see that in Portugal there is no regulation on betting advertising. So there are no limits for them to work with betting companies as a sponsor. So especially the closest competitor, which is Portugal right now, there's a big difference between those two competitions. And this is one element, but there are many other elements in which we see that as a Dutch football club,

It is super challenging to be competitive with your Belgium or your Portuguese peers. To have the same net salary as a player, a Dutch club simply needs to pay a higher growth salary because of the tax system that we have. A Dutch club needs to pay 150% of the average Eredivisie salary to a non-EU player. For the top three clubs, that's not too much of an issue.

But if you want to be a top six competition in Europe, also your number four, five and six need to perform. And for them, those salaries are very challenging to pay. And it's harder to meet those targets if you take out a whole tranche of potential sponsorship, as is happening with the betting sponsorship. If you limit the opportunities for the club to earn the money...

And if we have a system in which you need to pay higher gross salaries, that's the system that we look at, and that's very challenging. You're with Business Daily from the BBC World Service. I'm Matthew Kenyon, looking at the consequences of these significant restrictions being imposed on online gambling advertising and sponsorship in the Netherlands, particularly in sport.

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The job now for everyone who's lost the revenue stream coming from online gambling is to find a replacement. And that is a challenge, says Dutch Volleyball's Michel Everaert. Well, it's basically a totally different sell. We were for the first time in kind of a demanding market with more companies willing to sponsor than the properties that were available, which made the level of income increase higher.

But on the other hand, it's as I explained, there are many, many, many sources of income and in a healthy company or a healthy organization, this is quite well balanced. And in some sports, there will be a big disbalance with sports that have been sponsored really, really a lot by those betting companies, which may have a problem.

but I don't foresee a really, really big problem in volleyball. So for potential sponsors, it's a buyer's market, and that has consequences for sports and clubs across the board as their revenues are squeezed. It also, of course, has a significant impact on the gambling industry. So what might their reaction be?

Frank Obdewood is editor-in-chief of the Dutch online newsletter CasinoNews.nl. We've seen in Belgium, which is very close and they already implemented a kind of similar ban, that some of these...

Operators are trying to find a way around what is written in the rules right now. They've started promoting different websites, but with very similar names, very similar logos. We'll have to see if that happens in the Netherlands. Well, the best known example in Belgium is Unibet, which used to be the shirt sponsor of Club Brugge.

They set up a sports news website called You Experts and it's that branding, very similar in look, which appears on the front of the Club Brugge shirts now.

Unibet and their parent company, FDJ United, weren't able to do an interview, but they did send us the following statement. FDJ United is firmly committed to operating exclusively in regulated markets, they said. Responsible advertising and public messaging are essential to help consumers distinguish licensed operators from illegal ones.

In Belgium, they went on, Unibet has consistently followed evolving regulations, including those affecting sponsorship visibility. We remain fully committed to complying with all applicable rules, including any further clarification of existing regulations. In the Netherlands, Unibet is fully aligned with the upcoming rules on sports sponsorship.

Well, Casino News' Frank Obdewoord says the biggest operators will likely follow the rules. But that doesn't mean everyone. I talked to Arjan Blok, which is the CEO of Nederlandse Loterij, which is the market leader in the Netherlands with their online brand Toto. And he said, we are not doing that.

That's 100% clear. But that is a state-owned company. Some others might try and be creative. And we'll have to see if that happens in the Netherlands like it did in Belgium. But it wouldn't surprise me, to be honest. Gambling regulator Michel Groothuizen certainly expects some testing of the boundaries. Yeah, I don't know whether they will use exactly the same model as we see in Belgium for the creativity aspect.

of the industry is, well, without limits, I would say. So it could be in another way, but for sure they will try to keep the attention of the public. I think that the biggest fine that we have given thus far was close to 20 million euro. So it's

It could be quite substantial, but fining is not the only thing. I prefer to keep them on the right track and have the kind of relationship with the industry that they behave better. But we won't hesitate to fine.

Do you have ultimately the authority to remove a company's licence? Yes, we have. There's a long way to go before that happens, with any potential breaches likely ultimately to be tested in the courts. In the meantime, there will be an intense focus on the numbers of people who find their way back to the

to the unregulated market now that the legal operators have fewer ways of promoting their business. Frank Obdewoord from CasinoNews.nl again. The only people that abide by those new laws and the new rules is the legal operators. The illegal operators were already doing illegal stuff and they are not abiding by these new rules. So if you go on Instagram, you can't target people under 24, for example.

But the illegal operators, they're illegal already. So they can target whoever they want. And the regulator is not always well equipped enough to combat that. They can have the rules for the legal operators because obviously they are going to listen to the regulator. You know, they can get fined, they can even lose their license. But an unregulated operator like an illegal online casino, they don't have that license that can be taken away. Is it a concern from within the industry that they're...

public visibility as a perfectly legal regulated industry is being reduced and therefore they're losing competition to the illegal market. Yeah that's their number one concern. Obviously in the end it's all about money and I don't feel sorry for these massive gambling companies but they have invested a lot of money and time and effort. They were promised a legal market and

And now, bit by bit, they are changing the rules. And that is very difficult.

Every industry has different regulations, changing regulation, but to have so much change in just four years, that's quite problematic, I would say. And that's their main concern because that's competition they didn't envision to have in the Netherlands. Frank Obdewoord from online gambling industry newsletter Casino News. Whatever restrictions there are in this country, TV viewers here will still see plenty of online betting advertising when

whenever they watch matches played in countries where the law doesn't impose such restrictions. But here in the Netherlands, a short-lived experiment is coming to an end, with consequences which are yet to be fully played out. That's it for this edition of Business Daily from the BBC. I'm Matthew Kenyon reporting from The Hague. Thanks very much for listening.

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