Legal experts believe the white label gambling sponsorship model should not be at risk if the UK government implements a ban on unlicensed gambling sponsorships in football.
The move is being considered via industry consultation, which the Department for Culture, Media and Sport said is in response to the black market’s growing threat in the UK. This would seek to stop firms not licensed in the UK from leveraging Premier League clubs to appeal to a British audience.
In a 23 February statement, the government warned the black market has been linked to organised crime and that unlicensed operators “leave customers vulnerable to fraud and identity theft”.
Several Premier League teams are currently partnered with unregulated operators. However, there is also a model that enables operators outside of the UK to partner with licensed peers to offer a white label version of their product in the UK as part of securing a gambling sponsorship deal. At this point in the DCMS’ process, it is not yet clear how this model could be impacted.
White label model not a threat if govt focused on consumer protection
One lawyer who works closely with teams on operator sponsorship deals says white label sponsorships should not be threatened if the government is focused on eradicating money laundering and payments that put British consumers at risk.
“The white label model isn’t affected by that because you have got someone who is legitimately taking money from British consumers in a compliant way,” she notes.
Melanie Ellis, partner at Northridge Law, believes the future for white label partners is somewhat uncertain. She suggests the government could seek to prevent sponsorships by gambling brands that use a white label arrangement to advertise in Great Britain but also operate sites on their own behalf that are licensed elsewhere.
UK Minister for Gambling Baroness Twycross said white label football sponsorships were under investigation last December. This followed news that Curaçao-licensed BC Game was operating illegally in a number of markets and had been declared bankrupt by a local court for failing to pay out player winnings. At the time, BC Game was swiftly stripped of its UK white label licence and its sponsorship deal with Leicester City was thrown into question.
“I think it is most likely that the government will look to impose a prohibition on gambling operators sponsoring teams if they are not ‘subject to’ a Gambling Commission licence, which would allow for sponsorships to continue under a white label model,” says Ellis.
“It will be challenging to create such a ban which cannot be circumvented by operators, but also doesn’t inadvertently prohibit other arrangements where a licensee operates gambling sites under different brands.”
She believes this action would reflect the government’s concerns over unlicensed brands enticing British players. “Where a white label partnership exists, British consumers should be directed to the licensed site when searching for the advertised brand.”
How long could it take to implement the unlicensed sponsorship ban?
In terms of the timing of the potential ban coming into force, changing or updating legislation is generally a lengthy process in the UK. “I imagine they’d want to get something tabled before the summer,” says the legal source.
“The timing reflects a period of discussion between the Gambling Commission and DCMS as to the need for legislative change or other measures,” Ellis says.
“I anticipate the [two parties] will want to implement this [ban] within a reasonably short timeframe, but my view is at least 18 months will be needed to complete the consultation process and have the necessary legislation approved and brought into force.”
Licensed sector praises consultation
In recent years, UK football has been littered with questionable deals which have become stuck in limbo after brands have left the UK market. Last year Stake continued its multi-year front-of-shirt deal with Everton, despite a Gambling Commission investigation stripping it of its UK licence.
But there has been no clear guidance from the government in these situations. Teams have been told to carry out due diligence on operators. Entain CEO Stella David recently accused the Premier League of lobbying the government to “retain unregulated gambling brands on shirt sleeves and stadium hoardings”.
In a February letter to the League, she added that its “continued commitment to illegal gambling sponsorships [had] been deeply concerning”.
David is among a number of licensed operators that have praised the DCMS’ consultation, which it said would open “this spring”.
