April 2014, the Swedish Gambling Authority (Lotteriinspektionen) warned the
organisers of the Stockholm
Marathon that it would impose a fine of SEK 2
million (ca. € 221.000) for its sponsorship agreement with online betting
operator Unibet. The Authority found that the sponsorship agreement violates
§38 of the Swedish Lotteries Act, which prohibits the promotion of gambling
services that are not authorized in Sweden. The
organisers, however, refused to withdraw Unibet as its sponsor and prominently
displayed the Unibet logo at the event, which took place on 31 May 2014. As a
result, the organisers of the Stockholm Marathon now face legal action before
the Swedish administrative courts.
Source: ASICS Stockholm Marathon 2014
this case and many others demonstrate, sports organisers, clubs, and individual
athletes are insufficiently aware of the challenges that national gambling
advertising regulations create for entering into sponsorship deals with
gambling operators. But don’t worry; we've got you covered.
gambling advertising regulations
the EU, 28 divergent regulatory frameworks govern the advertising of gambling
services through e.g. sponsorship agreements between sports organisers and
first category of Member States strictly prohibits any gambling advertising (Estonia,
Latvia, Poland, and Lithuania). Sometimes the regulatory frameworks do include
a number of notable exceptions, however. In Estonia and Lithuania, for
instance, the advertising ban does not apply if only the name of the operator
or its logo is used. This creates a legal loophole for e.g. t-shirt sponsorship
second category of Member States only prohibits the advertising and/or
promotion of unauthorized gambling services (22 Member States). It follows that
at least one gambling operator, in many cases the (state-owned) operator who
retains a monopoly position, is allowed to advertise its services. Yet even
when authorized operators are legally entitled to advertise their services,
national gambling advertising regulations may impose certain qualitative (e.g.
advertising cannot encourage excessive or uncontrolled gambling) and
quantitative restrictions (e.g. TV watersheds). For the most part these
restrictions have little bearing on sponsorship. In France and Germany,
however, gambling operators are not allowed to sponsor sports events involving
third category of Member States has no rules specific to gambling advertising
as a result of outdated gambling legislations (Luxembourg and Ireland).
are the pitfalls?
lack of awareness of sports organisers, clubs, and individual athletes about
national gambling advertising regulations can be attributed, at least in part,
to the fact that liability pitfalls are often hidden.
the provisions on advertising in the national gambling regulatory frameworks
are frequently too vague or ambiguous for practical purposes. More often than
not, the regulations make no specific reference to (sports) sponsorship.
Consequently, the applicability of the restrictions to sponsorship can only be derived
from a broad interpretation of the definition of “advertising”.
only a few national advertising regulations clarify the extent to which both
parties to a sponsorship agreement, i.e. the sponsored party and the gambling
operator, can be found liable for breaching the regulations. Only in Denmark
and the UK, the relevant rules make it explicit that responsibility also falls
on the sponsored parties.
inconsistencies in the enforcement of the advertising regulations make it even
more difficult to anticipate the costs of non-compliance. In many instances, the
competences are spread over various authorities (gambling regulators,
advertising authorities, consumer protection authorities, police, etc.), which
diffuses their responsibilities. Moreover, Member States frequently point to
the fact that it is difficult to tackle advertising by foreign, unauthorized
online betting operators.
as the Swedish case illustrates, there are good reasons not to underestimate
an infringement of the prohibition to advertise unauthorized gambling services
is considered an administrative offence and will therefore be sanctioned with a
fine (which can be substantial, up to € 100.000 or even € 1 million). In
various Member States, the sponsored party may even risk criminal prosecution
(e.g. in Belgium, Denmark, Finland, Cyprus, Greece, Italy, Malta, and the UK).
events versus patchwork of national regulations
potential for conflicting national rules causes even more difficulties for
clubs or individual athletes participating in cross-border sports events. By
way of illustration, in 2007, the Bavarian authorities (Germany) imposed a fine
of € 100.000 on AC Milan for wearing shirts with the name of an authorized
operator (Bwin) in a Champions League game against Bayern München. The obvious
anomaly is that German sports fans are able to watch home matches of AC Milan and
Serie A on television and would therefore already be accustomed to watch the
team play with its normal shirt sponsor.
EU law currently stands, however, gambling operators and sponsored parties are
necessarily confronted with the regulatory burden to comply with 28 different
legal requirements. The European Court of Justice has repeatedly held
that gambling legislation is one of the areas in which significant moral,
religious, and cultural differences exist between Member States. In the absence
of harmonization in this field, it is therefore for each Member State to
determine the objectives of their policy on gambling and to define, in
accordance with its own scale and values, what is required to protect the
interests in question. The fact
that one Member State applies stricter rules, such as a general prohibition of
gambling advertising, than others does not in itself affect that assessment.
problem is exacerbated by the fact that gambling operators are increasingly
sponsoring international sports events. For instance, according to the
regulations of the European Handball Federation (EHF), every delegation
participating in the EHF Champions League must comply with the exclusive
sponsorship arrangements of the sports organiser.
For many years the online gambling operator, Bet-at-home, has been one of the
main sponsors of the EHF Champions League. The sponsorship deal allows the
operator to advertise in all handball arenas in which Champions League games
are held. When hosting qualification matches during the 2010-2011 Champions
League season, the Polish Handball club Vive Kielce faced a serious dilemma. It
had to choose whether to have the advertisements removed, which would mean
elimination from the tournament,
or to commit an offence sanctioned by the Polish Gaming Law. The club decided
to adhere to the regulations of the EHF and was subsequently sanctioned.
attention should therefore be paid to the use of technological tools that may
offer pragmatic solutions in these cases (e.g. the use of virtual advertising).
In any event, if a sports organiser induces participants in their events to
infringe national gambling advertising rules, they should arguably be found
liable and not the participant that is caught in a catch-22 situation.
a detailed overview of the national gambling advertising regulations and their
relationship to sports sponsorship, check out our latest EC Study on Sports
Organisers’ Rights in the EU, available at http://ec.europa.eu/sport/news/2014/study-on-sport-organisers-rights_en.htm.
 European Handball Federation, EURO Regulations
applicable as from November 1, 2010, Article 22.