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News Plus 13 Aug 2024 - 15 min read

Government faces heat from all sides over gambling advertising reforms; TV broadcasters seek covering bets on circa $160m revenue leakage; SVOD, SEO carve outs mooted

By Kalila Welch & Nadia Cameron

More than 12 months after the publication of the Murphy report, the Albanese Government faces mounting pressure from all sides of politics to hand down a blanket ban on gambling advertising. A total ban could slash up to $300 million in annual advertising revenue from Australian media owners, with TV having the most to lose – already the anticipation of a crackdown on gambling ads in the wake of the Murphy report has seen $40 million dollars leak from Nine and Seven alone. While NDAs have kept official commentary to a minimum, Communications Minister Michelle Rowland has spent the last week meeting with stakeholders to share the Fed's proposed reforms. So far, it seems a comprehensive ban won't be on the cards, with indications Government is willing to provide concessions to Australia's already struggling free-to-air broadcasters in a time of "diabolical trouble" per Labor frontbencher Bill Shorten. Yet it seems that no one is happy with what's on the table so far. 

What you need to know:

  • Political pressure is building from all sides for Labor to hand down a blanket ban on gambling advertising, with the Greens threatening to force action via a Senate vote this week.
  • However, the Federal Government appears set on compromise, with a partial ban giving concessions to a struggling media sector facing a $300 million advertising black hole. Per Nielsen Ad Intel data, $162 million in gambling ad spend was directed to the TV market alone in the year to April 2023. 
  • Communications Minister Michelle Rowland has been road-testing proposed reforms with media and other stakeholders in recent weeks. This Friday is the final deadline for feedback.
  • The Government has not publicly confirmed its plans, and tight NDAs have kept those involved in the consultation process officially quiet, but it is understood that the reforms will involve an extension of the current restrictions between 5am and 8:30pm for free-to-air broadcasters, with the addition of new caps and a blanket ban on gambling advertising across social media and digital platforms. Sponsored sports jerseys and stadium signage are understood to be outside of scope with some shades of grey around SVOD services.
  • It comes more than a year after the publication of the Murphy report, which advocated for a blanket ban of all gambling advertising. Advocates for a complete ban have argued that the Government's 'watered down' approach is a betrayal of the late Peta Murphy, who had helmed the inquiry into online gambling last year. 
  • Despite the concessions made for legacy media, there are concerns that the inconsistencies of the reforms create an uneven playing field – TV broadcasters believe that the logos that appear on jerseys and signage during sports broadcasts should be subject to the same rules as advertising content. 
  • Meanwhile, online gambling firms are split on the details of the reforms. Tabcorp is advocating for a complete ban on TV so long as advertising in gambling venues is safeguarded, while Sportsbet says the sector is already regulated enough. Entain sits somewhere in the middle. 

As the battle rages around whether the Federal Government should deliver a blanket ban on gambling advertising or not, questions around how Australia's free-to-air broadcasters continue to remain commercially viable, and the concessions required to keep them there – bets or not – are gaining fervour.  

More than a year after receiving the Murphy Report’s recommendation for a complete ban on gambling advertising in Australia over a multi-phased, three-year period, Government is under increasing pressure to start making it happen and enact the ban. Industry, lobby groups and the Greens are all voices within the chorus, with the latter threatening to force action through Senate sittings this week.  

The Government has not yet revealed its hand publicly and insisted groups and stakeholders participating in the latest round of discussions on proposed regulatory changes held over the last two weeks were made to sign NDAs. 

However, from what we know of the Government’s proposed reforms so far, it's clearly willing to make concessions for Australia's free-to-air broadcasters to avoid cutting off an advertising revenue source that was worth around $162 million in the year to April 2023, per Neilsen Ad Intel.  

Specifically, the Government is planning to give free-to-air TV and radio the ability to continue serving gambling ads with new frequency caps and an extension to the existing restrictions between 5am to 8:30pm. 

By contrast, blanket bans on gambling advertising will be enforced across digital, app and social platforms, with insiders citing the Government’s position that the online environment is just ‘one click’ away from an online wagering service.  

During his appearance on ABC's Q+ A this week, Labor frontbencher, Bill Shorten, said he did not support a total ban out of concern for commercial media companies, which he said were "under massive attack by Facebook." 

"Some of you might say, 'well, bugger them, just don't worry, we don't need free-to-air media' ... but free-to-air media is in diabolical trouble," he said. 

Already, the peak body for Australia’s commercial free-to-air networks is advocating for spectrum fees (Commercial Broadcast Tax) to be reduced to offset the reported $40 million in revenue that has already bled from Nine Entertainment and Seven West Media since the Murphy report’s publication last June. The fees cost the sector approximately $40 million a year.  

“Whatever the precise policy outcome of this debate, it is clear there will be a significant impact on commercial television broadcasters from the loss of advertising revenue,” Free TV boss Bridget Fair told Mi3. “It is critical that any proposed approach recognises this impact on broadcasters by reducing other regulatory impacts in particular the outdated Commercial Broadcast Tax.” 

Known knowns

While strict NDAs have kept official commentary to a minimum, it hasn’t stopped outlines of the Albanese government’s proposed reforms from leaking to the press. NDAs never do.

According to multiple media reports confirmed by Mi3, Labor has landed on an extension to existing regulations on TV, radio and catch up. Broadly speaking, the proposed reforms would see gambling advertising banned in the hour before and after live sport, with a new cap of two ads per hour on free-to-air TV until 10pm will be introduced. Notably, there'll also be a blanket ban across social networks, digital and app platforms.  

It's understood the proposed reforms do not address the appearance of gambling logos on sponsored sports jerseys or on-field signage, nor is SEO included in the scope of the blanket ban on digital.  

Sources talking to Mi3 indicate a key reason given for the distinction is the fact digital and social platform advertising offers direct access opportunities to take up gambling opportunities via clickthrough advertising, while traditional media such as linear TV and radio do not. Additional challenges around capping frequency of gambling ads in a digital environment versus traditional media channels is another hurdle, although exclusion targeting would provide further ability to limit viewing of such advertising to vulnerable groups such as children and known problem gamblers.  

By contrast, Mi3 understands there remain some shades of grey around SVOD services such as Foxtel, with a formal stance not yet fully locked in.  

Sources close to the consultation process have confirmed the draft proposal has been put forward by Communications Minister Michelle Rowland to various groups in the last two weeks, with the most recent set of stakeholders given until Friday 16 August to provide their feedback to the Government. 

The Greens are not alone in their criticism of the government’s proposed reforms, which fall short of the comprehensive ban on gambling advertising put forward by Peta Murphy in the report, ‘You win some you lose more’.  

The report offered up 31 recommendations to the Government by the late Labor party MP, who had overseen the inquiry into online gambling as chair of the House of Representatives Standing Committee on Social Policy and Legal Affairs. Murphy passed away after a prolonged battle with breast cancer six months after publishing the inquiry’s findings in June 2023.  

According to Freedom of Information documents obtained by independent MP Kate Chaney, Rowland’s office had held 66 meetings about gambling reform in the six months to December 2023, as gambling companies, sporting bodies, media businesses, and advocacy groups demand to have their voices heard.  

Media braces

Media owners have found themselves in the middle of the government and online gambling operators – with a lot to lose. Hence the media lobby scrambling to ensure the Government understands the extent of commercial impact a partial or comprehensive ban on gambling advertising might have.  

Anticipation of the crackdown on gambling advertising has already seen tens of millions of dollars slashed from wagering firm’s ad spend, with estimates that Nine and Seven have already each lost $20 million each, per the AFR

While there’s some flux in figures between suppliers, the estimates largely track with the last few years of ad spend data available. 

Neilsen’s Ad Intel puts ad spend for the gambling sector at $310 million in 2022. Using the same data, though for a conflicting 12-month period, the Australian Communications and Media Authority (ACMA) reported in the year to April 2023, $238.63 million was spent on gambling advertising across free-to-air TV, metro radio and online (including social media). 

Similarly, Guideline SMI reported gambling ad spend was back 19.6 per cent year-on-year in April 2024. However, a 6.2 per cent year-on-year increase in the month of June suggests the decline is not yet a straight line. According to Guideline SMI, a 50 per cent rise in gambling category ad spend within digital channels, and a 56 per cent bump for outdoor, helped to offset the 9.6 per cent decline for linear TV.  

With the early impacts of the reforms already evident, it's clear any major regulatory overhaul would be a blow to revenue and already shrinking margins across an increasingly fragmented media landscape.  

Also of concern to the sector is that reforms, whatever they look like, set a fair playing field. 

In particular, it’s understood broadcasters aren’t impressed by the government’s failure to apply the same rules to the gambling logos appearing on team uniforms and stadium signage during game play and which end up on screen via broadcasts.  

As Fair told Mi3, “any proposed restrictions should also be fairly applied across all advertising platforms, including jerseys, signage, social and online – including search”.  

Free TV last year commissioned research that showed 90 per cent of gambling ads during live sport were in the form of logos and signs around the stadium. According to reports in the AFR, the group has now sought legal advice about the government’s powers to ban such ads.  

This latest fight comes on the background of a difficult few months of regulatory affairs for the Australian media sector, following the disappointment of anti-siphoning and prominence regulations, as well as their ongoing war with Big Tech, or more precisely Meta, via the News Media Bargaining Code.  

All of which comes amid a protracted squeeze in the advertising market and global streaming platforms now selling ads.

In several of Mi3’s conversations, industry leaders expressed frustrations with the Government’s tendency to make media owners the collateral damage of advertising restrictions that fail to address the root more directly. The implication was that such sweeping measures are seen as an easier or perhaps optically better fix than directly penalising gambling operators.  The comparison was made to a ban on junk food advertising versus a sugar tax by more than one party.   

Hybrid-funded broadcaster, SBS, took the issue into its own hands – or the hands of its audience – earlier this year, when it gave viewers on its BVOD service the ability to 'opt out' of gambling, alcohol and fast food advertising. The feature has been lauded by SBS Chief Marketing and Commercial Officer Jane Palfreyman as "a tremendous success". But it has only been taken up by upwards of 1,000 users to date – and SBS has a significant share of the BVOD market. 

"It is all about ensuring the consumers who receive these ads are consumers who are interested in the category – the opt-out ensures that we are meeting the needs of both the consumer and the advertiser," said Palfreyman. 

Operators split  

Online gambling operators fall squarely at the centre of the reform debate, and broadly speaking, have strongly advocated against a comprehensive ban. 

When the Murphy Report first landed last June, the peak body for Australian‑licensed wagering service providers (WSPs) Responsible Wagering Australia (RWA) called on the Government to “take a balanced approach” to online wagering reforms.  

The lobby group argued a blanket ban on gambling advertising from regulated providers would only push those at risk to seek out unregulated bookies in offshore markets.  

“RWA has consistently called for balanced measures which make it easier for Australians to avoid the offshore market, and ensure that wagerers know which sites are legal and safe to use,” said RWA chief, Kai Cantwell. Notably, Cantwell was previously the Chief of Staff to Anne Ruston, the Morrison Government's Minister for Families and Social Services until 2022. 

“By rolling out stronger customer ID verifications, working to remove the use of credit online, and implementing the National Consumer Protection Framework hand-in-hand with the Government, we have been on the front foot of consumer protections,” Cantwell added, pointing to the $6 billion RWA members contributed to the Australian economy in 2022. Analysts have suggested the number of new bookmaker customers each year could halve to 225,00 under Labor’s proposed crackdown. 

While the RWA’s stance would suggest consensus, the major online wagering players each have their own stance on the reforms. 

Tabcorp is in support of a ban across TV and restrictions on outdoor betting advertising including billboards, stadium signage and sports jerseys. In its submission to the online gambling inquiry, Tabcorp states plainly that “there is too much gambling advertising” and promised to “voluntarily stop all gambling advertising on free-to-air-television between 6:30am and 8:30pm” if further restrictions were not agreed upon in a “reasonable timeframe” - they said they’ve already started phasing it out.  

Tabcorp is primarily concerned about safeguarding gambling advertising in venues, in line with its own commercial retail interests and significant in-venue screens operation. Likewise, the company has called on the Government to incentivise betting in local retail venues (like TAB agencies). Chief Customer Officer Jenni Barnett last year told Mi3 she had already scaled back TV ad spend and is instead directing budget to personalisation efforts and its owned properties.

For online-only player Sportsbet, the sector is already heavily regulated, and the focus should instead be on developing a consistent national framework for specific elements of advertising like promotional inducements. 

Entain, the parent company of Neds and Ladbrokes, sits somewhere in the middle. It disagrees with a blanket ban but says it has always supported the current TV ban and is open to further evidence-based changes to restrictions. Considering the shift in public sentiment, the company last year opted to stop putting its logo on sports jerseys.  

Ban maximalists  

On the other side of the equation, the campaign for a comprehensive gambling ban has the backing of a broad cross section of Australian politics and lobby groups. 

Alongside the Greens, independent and teal members have been vocal in their criticisms of the Government’s ‘watering down’ of the reforms recommended in the Murphy Report. 

“This proposal to cap rather than ban gambling advertising is a cop out and a betrayal of the work and legacy of the late Peta Murphy,” ACT independent senator David Pocock told Mi3.  

Pocock, like others in support of a comprehensive ban, has said the 31 recommendations made in the Murphy Review were “informed by extensive evidence” from experts and those with lived experiences. He noted there was strong support for a comprehensive ban both in parliament and among the broader Australian community. A recent Alliance for Gambling Reform survey of 1000 Australians found 77.6 per cent thought there was too much gambling advertising in sport and 71.3 per cent believe gambling advertising should be banned from sports completely.  

“Government should listen to what communities want and act in the interests of the people they were elected to represent, not vested interests,” he said. “We have seen elsewhere that partial bans simply do not work, they just concentrate advertising in the remaining permitted platforms.” 

Asked by Mi3 about the commercial impacts a ban might have on Australia’s media sector, Pocock said while “support for public interest journalism is a concern” it “cannot come at the cost of the harms we are seeing play out in our communities, from suicides, to family breakdown and increases in family and domestic violence”. 

The senator is one of 74 high profile Australians to have put their name to an open letter penned to the Prime Minister and Opposition Leader by the Alliance for Gambling Reform. The letter, which calls on the Government to adopt Murphy’s proposed three-year, phased-in ban on all gambling advertising as well as inducements and promotions, pointing to the “$25 billion in annual losses” attributed to the gambling sector.  

“Our children are also being targeted by the tsunami of gambling ads that assault our screens, especially around coverage of our major sporting codes. It is ensnaring a whole new generation of gamblers,” wrote the authors. 

Signatories include former Liberal Prime Ministers John Howard and Malcom Turnbull, Anglicare chief Simon Miller, family violence prevention advocate Rosie Batty, Wesley Mission CEO Stu Cameron, former NSW Premier Dominic Perrottet, and journalist Jess Hill. Amongst the current members and senators that have backed the letter are Independent Federal MPs Andrew Wilkie, Zali Steggall and Zoe Daniel, as well as the Greens Senators Sarah Hanson-Young and Senator Lidia Thorpe, and the Animal Justice Party’s Georgie Purcell. 

Speaking to Mi3, Alliance for Gambling chief Martin Thomas said of the broad spectrum of signatories it was “hard to find someone who [does] support gambling advertising”. Fronted by Baptist minister and prominent social justice leader Tim Costello as its Chief Advocate, the Alliance has been pushing for the complete uptake of the Murphy Review’s recommendations since the report was first published. 

Meanwhile, the Greens have indicated they wish to force a Senate vote in this current sitting week for a ban on gambling advertising. Spokesperson for Communications and Manager of Greens Business in the Senate, Senator Sarah Hanson-Young, said it was time for Parliament to listen to the experts, respect public opinion and back a full ban on gambling ads.  

“Labor should honour the legacy of Peta Murphy, not the profits of parasites in the gambling lobby,” she stated. “Australia banned tobacco ads in this country because they did acute harm. Gambling companies profit from addiction and misery, targeting our kids and wrecking families. They must be banned too. 

“The gambling lobby may have deep pockets, but the public want strong action. Our amendment will be a test for Labor and the Coalition this week.”

Rules, breaches

The regulation of gambling advertising is overseen by federal media watchdog, ACMA.  

The current restrictions ban the appearance of gambling advertising during playing, and the promotion of betting odds from commentators or on-ground gambling service representatives from 30 minutes before until 30 minutes post-game. Gambling advertising is allowed during breaks in play such as half time.  

There are also rules stating any person who represents a gambling organisation must be clearly identified and must not be part of the commentary team nor appear to be at or around the venue. Across the board, it is illegal to promote gambling content that is socially irresponsible, i.e. targets minors, exaggerates the chances of success, or makes a connection between betting or gambling and alcohol. 

Since 2018, the restrictions have been expanded in the interest of protecting children who might be listening or watching. For sports broadcasts between the hours of 5am and 8:30pm, all gambling advertising and promotion of odds is banned from 5 minutes before the scheduled start of play until 5 minutes after play has concluded, inclusive. The regulations also brought streaming services (like Netflix) in line with linear broadcast regulations for the first time. 

But there are exceptions. Broadcasts of horse, harness or greyhound racing are not subject to the additional rules in the 5am to 8:30pm window, nor are advertisements or promotions for lotto or Keno.  

In the years since the last reforms were introduced, ACMA has investigated breaches committed by Seven, Nine and Foxtel’s Kayo, amongst others. 

Notably, Seven came under fire for multiple breaches during its 2021 broadcast of the Tokyo Olympics, and two months later, Nine was caught out for a gambling advertisement aired at 8:21pm during the half-time break of the NRL grand final. Both broadcasters got off with court-enforced undertakings, requiring them to update their systems and practices and report back to ACMA. Two years later, Seven was issued with an infringement notice and a fine of $13,320 for a breach during a 10:38am live stream of an NFL game on 7Plus.  

Foxtel’s sports streaming service Kayo has also fallen foul of the rules, once during AFL coverage in 2022, and more recently, for a series of breaches owing to a system error that occurred over six weeks in early 2023. According to ACMA, the breach involved 16 ads across 267 live sports events, with the streamer required to take remedial action or else face penalties of up to $626,000 per day. 

Aside from ACMA, the gambling industry is also held accountable by industry-specific standards under the Australian Association of National Advertisers (AANA) Wagering Advertising and Marketing Communication Code. Overseen by Ad Standards, the Wagering Code was introduced in 2016 in response to community concern around the volume of gambling advertising. It sought to provide guidelines for advertisers in the absence of a unified national framework at the time.

The Wagering Code is primarily concerned with the content of the ads – i.e. who is portrayed and how. For example, it outlines that gambling ads must not be directed primarily to minors, portray or condone wagering in combination with alcohol consumption, or imply a promise of winning.  

Since 2018, there have been 23 upheld complaints against gambling ads, the majority belonging to Sportsbet, though Entain, Unibet, LotteryWest and Amused Australia were also among the offenders. Most of the breaches occurred on free-to-air or pay TV, and all but one were modified or discontinued following Ad Standard’s determination.

While the AANA operates independently of the Federal regulations under ACMA, and the Wagering Code is a voluntary framework, it is an important part of the full regulatory picture. As such, the AANA's chief Josh Faulks has acknowledged "the concern within the community around gambling advertising and that some changes need to be made".

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