Formula One has relaxed its stance on gambling sponsorships and has signed a deal that is reportedly worth $100 million over five years.
Gambling sponsorship deal to improve sport
Bernie Ecclestone ran F1 for about 40 years before Liberty Media acquired the franchise in 2016. During his tenure, Ecclestone refused to accept gambling endorsements, arguing that it could damage the sport’s image.
Now, however, the Financial Times reports that Liberty Media, which is run by US billionaire John Malone, has signed a contract with Interregional Sports Group (ISG), a London-based marketing agency, for worldwide rights to gambling sponsorships in F1.
According to the report, the deal is thought to be worth $100 million over five years, which has been paid up front.
Sean Bratches, managing director of F1’s commercial operations, told the Financial Times that viewers were becoming used to seeing gambling sponsorships in sports. Not only that, but he also claims that it will improve the sport.
“There’s an understanding that sponsorship injects economics into the sport that improves the sport to the fan,” he added. “You have to balance that with how you serve fans. This is an opportunity that serves both of those masters.”
More US states embrace sports betting
Earlier this month, it was reported that the National Football League (NFL) will permit certain gambling ads during the season.
In May, the US Supreme Court overturned the 1992 ban on sports betting in the country. The NFL, among others, had fought for years to prevent legalization. Many felt that it would have a negative effect on the sport’s image.
The NFL did propose to Congress that rules should be implemented to control sports betting. In addition to its concerns about image, the league didn’t want sports betting operators to gain financially from them without paying any compensation.
CBS, one of the NFL’s broadcast partners, announced in August that its sportscasters wouldn’t refer to sports betting during their telecasts of the league’s games.
States that have legalized sports betting, or are considering it, include Illinois, Kentucky, New Jersey, and Pennsylvania. Delaware was the first US state to take advantage of the Supreme Court’s decision on sports gambling, and more states are also taking steps to embrace it.
Gambling ad ban
However, not everyone is on board. In the UK, for instance, there have been calls to ban gambling ads due to the exposure of young people to pro-gambling messages.
Last month, Stewart Kenny, a co-founder of Paddy Power, voiced his support for a gambling ad ban. At the time, he noted that gambling advertising is “normalizing” betting for children and that radical change was needed. August also saw the Italian parliament pass a ban on gambling advertising. This includes sports sponsorships with gambling companies.
Under the new regulations, which will take effect on January 1, 2019, it will be illegal to advertise gambling products online, on the radio, or on TV. Those that already have existing contracts to fulfill will have until June 30, 2019, to finalize them.
Of course, while F1’s move to open the doors to gambling sponsorships will indeed be a lucrative avenue for revenue, there may be some who won’t view it in the same light.