User:Leigh.Sherman/Sports Sponsorship and Government Regulation

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Please click on the link to the right to view my presentation on Sports Sponsorship and Government Regulation BPS 2011. Sports Sponsorship and Government Regulation BPS 2011

The issue surrounding the relationship between sporting organisations and alcohol, fast food and gambling sponsorship is a controversial topic, particularly when many Government campaigns are aimed at addressing various problems that are caused primarily by these industries. If key contributors to problems such as gambling addiction, alcohol abuse and obesity are openly promoted in a popular public forum such as the sports industry, then Government policies are fighting a losing battle.

The Crawford Report issued to the Government suggests that sporting organisations have a responsibility to play a role when addressing the public and that they should promote a healthy lifestyle that includes activity, responsible alcohol consumption, a healthy diet and the practice of responsible gambling. Surely there is a conflict of interest when they are sponsored by alcohol, fast food and gambling companies.

The problem lies in the co-dependent relationship that the two have developed; each party gets large amounts of public exposure and great profitability in return. Meanwhile the Government is trying to address important issues that are fuelled by the very products sponsoring sport.

Certain recommendations in the Crawford Report explain that in some instances implementing restrictions on advertising and sponsorship in some sporting codes could seriously hinder sport development from grass roots right though to elite levels and eventually lead to their collapse all together. Despite this there is clearly a need to find a common ground in which both Government and the sports industry succeed.


As many professional sports quickly move toward a business model with equal amounts of focus on both off and on field performance, the involvement and importance of sports sponsorship has grown. Since the Australian Tobacco Advertising Prohibition Act 1992 and the subsequent complete removal of tobacco advertisement in Australian sport in 1996, the void has been steadily filled by alcohol and more recently betting outlets. This article will look at the relationship that has developed between various sporting codes and bodies with a particular focus on the role of gambling outlets. Although the relationship is undoubtedly fiscally successful, there are various and more complex issues involved. This article will examine the contrast created between gambling sponsorship and Government initiative to curb problem gambling among communities, addressing the questions raised when considering gambling as an addiction as well as possible solutions as well as looking at the relationship that the two parties have developed and how symbiotic it is becoming.

Government and Gambling[edit]

Brendan Goddard of the AFL club St. Kilda playing against Carlton in Round 24, 2011 with their Centrebet shirt sponsorship .Photo by StAnselm

Today, having a bet on the races or football is common practice and is considered by many as part of being Australian. It's become such common practice that it's not usually questioned and so the relationship between gambling and sport has grown from strength to strength.

Penrith Panthers new home ground, Centrebet Stadium.Photo by S.A.Mc9

The first issue surrounding the relationship of sport and gambling outlets lies in the clash it creates with government campaigns and initiatives. Many government initiatives, past and present, are targeted toward curbing problem gamblers. Yet it is becoming more common to see team sponsorship by a gambling company, on ground advertising, constant bombardment though TV, radio and other social media forums. And more recently even naming rights are up for grabs, for example Centrebet Stadium is the now home for the Penrith Panthers National Rugby League Team (NRL, 2011)

At the moment the control over where gambling companies can (or can't) operate is left to State and Territory Governments rather than the Commonwealth resulting in a lack of uniform regulations across the country. This loop hole opened the flood gates in 2008 when Betfair, based in Tasmania, successfully challenged the Western Australian Government's legislation in the High Court of Australia. The High Court ruled that it was unconstitutional to stop interstate operations of gambling outlets like Betfair operating within WA (Durnan 2011). Essentially this allows outlets to base themselves in States and Territories with no opposing legislation and then expand into states where they can't gain licencing. The exploitation of this loop hole created a bombardment of advertising and sponsorships, particularly within sport, so companies could gain a strong foot hold in the market. At the moment Australian states are divided in their approach meaning that any legislation currently in place is effectively nullified by the lack of legislation elsewhere. The total value of sports betting has now been estimated to be close to $400 million annually, exploding from the estimated $230 million in the 08-09 financial year (Livingstone 2011).

The spread of gambling sponsorship on a national scale creates a platform of national exposure that opposes with government initiatives that are aimed at addressing problem gambling. The fact that Australians have the highest loss per resident figure in the world (The Economist 2011) highlights the importance and relevance of government action to try and curb the development of problem gamblers. Particularly when the recently released Gambling and Productivity Report (PC 2010) estimates that between 80,000 and 160,000 Australian adults suffer severe problems caused by their gambling habits. The report also found that an additional 230,000 to 350,000 gamblers experience lesser levels of harm, but who are at risk of developing into problem gamblers. It should be noted that sports betting isn't the prime contributor to these figures, but it is the fastest growing betting market, and thus should be strongly considered when looking at gambling addiction as a whole.

Perhaps the biggest conflict lies within the Australian Government itself. Livingstone and Adams (2010) raise an interesting point when they address the fact governments are heavily dependent of the revenue created by Australian gamblers. They showed that an average of 8.2% of state tax revenue was obtained through gambling revenue. With figures like that, what incentive is there for governments, from a financial point of view, to control the industry any more than they are currently?

The Crawford Report issued to the Australian Government by the Independent Sports Panel (ISP 2009) regarding the administration of Australian sport suggested that sporting organisations have responsibilities when interacting with the public and that they should promote a healthy lifestyle that includes physical activity, responsible alcohol consumption, a healthy diet and the practice of responsible gambling. Given the lack of consistent policy and the widespread involvement of gambling companies with sporting organisations, it could be argued that many of these organisations and the governments are happy to neglect these responsibilities, for their gain but at a cost to a portion of the public.

Video:Tasmanian Government (2009) Anti-gambling 'Prevention' 0:30min

An Addiction?[edit]

Shaffer (2011) describes addiction as being 'a relationship with an activity that has adverse biological, social, or psychological consequences for the person engaging in these behaviours'. There is a much stronger association with the word 'addiction' and alcohol and drugs rather than with gambling. But based on the definition, the classification of gambling as a possible addiction is unquestionable. It is still interesting to note that the term 'addiction' still has a stronger association with substance abuse (drugs and alcohol). Perhaps because gambling is an activity rather than a substance and also that gambling's effects are highly personal and not usually physical, making them easier to hide from others. (Shaffer 2011).

Adding to those findingsShaffer (2011) also addresses the fact that, like drugs and alcohol, gambling can produce a physical dependence and create an abstinence syndrome (withdrawal). Traditionally it was thought that this dependence was limited to drugs and the chemical effects that they create when ingested. New evidence suggests that this neuroadaptation can develop from addictive behaviours, like gambling, as well.

When looking at gambling equally as a source of addiction along with alcohol and drugs, you come back to the question over regulation, or the apparent lack of. The Evolution of Alcohol and Tobacco Sport Sponsorship Agreements (2011 n.d.) makes a valid point when they also address the lack of regulation over alcohol sponsorship. Particularly when sport, alcohol and gambling are considered favourite Australian past times which often go hand in hand, yet also have a huge potential for damage. As mentioned already, the complete ban of tobacco sponsorship and advertising in Australia was largely based on the evidence showing that nicotine addiction via smoking is a major cause of various and very serious health problems. Given the links found between alcohol consumption and heart disease, liver damage, cancers of the digestive system, increased risk of breast cancer and memory dysfunction Drug and Alcohol Services South Australia (2010) and then also considering gambling's potential effects (financial crisis, homelessness, anxiety, depression and suicide) (Brett 2009), it is probable that eventually both industries, no matter how profitable, could face similar legislation.

"It’s said that the one key difference between those who gamble for recreation and those who have a problem is that recreational gamblers expect to lose." (Brett 2009)


Despite the biggest global financial crisis, from which Australia was not immune, the gambling industry continued to grow. Brett(2009) attributes this to day to day stresses, like work or finances, things which the financial crises affected most, being the promary cause for the problematic gambling. Based on this he suggests that preventative programs should not try and focus on gambling addiction on its own, rather programs should be integrated to try and help treat the causes rather than the symptom itself.

Additionally the PC(2010) also found that the implementation of programs, irrespective of their methods, have a very high success rate for the participants while in the program. Upon leaving it also states that client follow up sessions decreased the involvement of their gambling participation rates and consequent problems.

Based on these findings education and treatment can be an effective tool. The high success rate associated with most of the methods suggest that despite of the ease of access and availability of gambling, education and treatment are likely to be the most effective tools in curbing problem gambling.


Research from Mahr et al. (2006) found that sponsorship agreements with gambling companies were the most common form of sports sponsorship attributing a total 18.8%, showing that the sponsorship of sport by gambling is extremely successful and profitable to both parties. But this strength is also the relationships weakness. The two have become so intertwined and codependent that taking one away from the other could potentially be financially catastrophic.

Although the sponsorship of gambling outlets could be considered safe for the mean time considering the current legislation, the proposed poker machine reform from Tasmanian MP Andrew Wilkie poses a real threat to the financial stability of sport. Findings from the PC (2010) showed that tax revenue from gambling fell in the range of $12.1 to $15.8 billion with the cost to problem gamblers ranging from $4.7 to $8.4 billion. This means that there is a net profit of between $3.7 and $11.1, a portion of which is designated to various sporting organisations, both at the grass roots and elite level. So despite its financial success, many are questioning whether it is ethically acceptable. Adding to the problem is that the current government must try and pass this legislation or risk losing Andrew Wilkie's support and most likely their control, greatly increasing the chance of the legislation becoming a reality.

In protest to these changes the Australian Football League (AFL) and NRL launched public campaigns in an effort to draw support away from the proposed legislation. Many people within the AFL, NRL and clubs that run the pokies argue that taking away the primary contributor to sport will greatly diminish its capacity to survive, let alone grow. ISP 2009 also states that many sporting organisations derive significant levels of funding from sources like alcohol, gambling and fast food and that legislation, if not carefully implemented, could significantly affect the industry. In saying that it also says that in order for sport to continue to grow additional funding will be required and the responsibility for the most efficient allocation and sourcing of funds falls on the Australian Government. More now than ever, sport is referred to as being a 'business', and in any successful business profitability is a key success. If there is no legislation on sourcing funding from gambling and it is the most profitable and efficient, then sports organisations will continues to utilise it because there is no need for them to change.

Aside from the question over the sourcing of funding from gambling, having a sponsorship deal between a betting agency and sporting organisation leads to the possibility of corruption, the impact of which has been seen often in international cricket and recently in the NRL. Corruption diminishes the reputation of the game and also creates more questions over the legitimacy of such sponsorship agreements. Although many sports bodies defend this claim by pointing out that by having this sponsorship the sports organisation and gambling companies can work together in detecting suspicious betting, particularly by players and officials (Livingstone 2011).

K. Lyons (personal communication 29th October 2011) drew an interesting comparison when he considered the link between Kings Cross injecting rooms and the world of sports sponsorship and funding from gambling. Injecting rooms, also a very controversial topic, were introduced to help reduce the use of drugs (particularly heroin) on the streets, reduce the number of deaths due to overdose and to try and curb the incidence of diseases such as hepatitis caused from needle sharing, the centres also offered counselling support. Overall, evidence shows these to be generally successful (Donlan et al 2000). Injecting rooms worked because rather than trying to completely eradicate a drug use (an impossible task), they accepted that it was inevitable and set up measures to control it. Sports organisations argue an extremely valid point in saying that they are better off utilising their sponsorship to control corruption rather than take on the impossible task or complete eradication on their own.

Finding a Balance[edit]

The solution lies somewhere in the middle, clearly neither complete control or lack of control by government will result in the continued growth of sport as a whole. Ultimately the decision to gamble, like drinking alcohol or ingesting drugs, lies with the individual who is free to decide how they spend their money. As long as there is the opportunity for sporting organisations to source money from gambling then they will do so, the responsibility of how much is created and distributed from these sources ultimately lies with the government.

Reference List[edit]

  • Donlan, K, Kimber, J, Fry, C, Fitzgerald, J, McDonald,D & Trautmann, F 2000, 'Drug consumption facilities in Europe and the establishment of supervised injecting centres in Australia', Harm Reduction Digest, vol. 19, pp. 337-346.
  • Independent Sports Panel 2009, Future of Sport in Australia, cat. no. 5582, Commonwealth of Australia
  • Livingstone, C & Adams, P, 'Harm promotion: observations on the symbiosis between government and provate industries in Australasia for the development of highly accessible gambling markets', Addiction Journal, vol. 106, issue 1.
  • Maher, A, Wilson, N, Signal, L & Thomson, G 2006, 'Patterns of sports sponsorship by gambling, alcohol and food companies: an Internet survey', BioMed Central, pp. 1-9.