Significant drop in revenue
Media giant Sky has reported a decline of 18.2% in its revenue from advertisers in the third quarter of 2019, which it is blaming on heavy restrictions on gambling advertising.
In total, Sky advertising revenues dropped from $545m in the third quarter of 2018 down to $446m for the same period in 2019. These are the first quarterly figures to be released since the UK ad restrictions came into place.
Comcast blames gambling ad ban
In the report that accompanied these official quarterly results, the owner of Sky, Comcast, spoke about the reasons for these ad revenue declines.
The report states that the decline in revenue
reflects an unfavorable impact from a change in legislation related to gambling advertisements in the UK and Italy, as well as overall market weakness.”
All forms of gambling advertising, including sponsorships, are banned in Italy. There are also bans on gambling advertising during live sporting events in the United Kingdom.
The UK’s whistle-to-whistle ban came into effect on August 10, 2019. This ban was introduced just before the start of the lucrative English Premier League soccer season. Therefore, this ad ban only affected less than two months of ad revenue figures for Sky. This means that future quarterly reports could see even further gambling ad revenue declines.
Other key figures
In total, ad revenue represents just 9.8% of Sky’s total revenue. The company did previously have its own gambling offering, Sky Bet. However, it was sold to the Stars Group for £3.4bn ($4.36bn) back in 2018.
Despite falling quarterly revenue, the underlying profitability of the company did manage to increase.
Campaign for advertising restrictions
There has been an extensive campaign globally to curtail the prevalence of pro-gambling ads.
The Italian government introduced its ad ban on January 1, 2019. MPs in the UK went back and forth for a long time about gambling advertising restrictions before finally agreeing on a whistle-to-whistle ban.
With the majority of soccer teams in the top two English leagues having gambling companies as kit sponsors, there are also calls to curtail this form of gambling advertising also.
As a lot of young and impressionable people watch sports and they can become susceptible to pro-gambling messages, gambling often becomes normalized and addiction can take hold in a lot of cases.
