The controversy surrounding Tom Waterhouse and the subject of gambling and sport dominated the media last week, capped off with a parliamentary inquiry into the banning of betting odds aired during sports broadcasts.
But shifting focus from the social and cultural implications on the subject (for that you can check out pieces from Peter FitzSimons and Chris Berg on SMH and The Age respectively) the subject has caught my attention for another reason.
Watching an NRL match on the weekend I was intrigued by what I saw – the Centrebet sponsored St. George Illawarra Dragons against the Sportsbet backed Newcastle Knights, being shown on a Channel 9 television broadcast constantly interrupted by Tom Waterhouse promoting his self-titled gambling site.
As any company promoting its product or service would tell you, some of the benefits of sponsorship are brand recognition, recall and loyalty – and in the sports betting industry the stakes are high.
In a study completed by The Economist in 2010, Australians were found to be the world’s biggest gamblers per capita, spending the equivalent of $1300 per adult each year in an industry worth more than $20 billion annually.
Yet sports betting represents around 2% of this total, at just over $300 million. But with an annual growth rate of almost 15% it is by far and away the fastest growing gambling market segment, reaching new heights with its rising popularity as a “social” form of gambling and ease of access across all mobile products.
So I wondered – how would any of these bookmakers hope to achieve brand recognition, or consolidate an effective brand recall strategy? Surely the overlap created by three betting agencies within the space of one minute does little to achieve these goals – especially given the inherent cost to sponsors of one of Australia’s main sports codes?
The national football competition, the A-League, imposes heavy restrictions on club sponsors. For example, clubs can’t sign car companies as sponsors as FFA’s major sponsor is Hyundai. Same goes for the league’s sponsorship of Optus, which effectively means that Telstra or Vodafone are locked out of elite football sponsorship, providing sponsors with a level of comfort that their sponsorship will not become diluted.
Moreover, some of these betting agencies also sponsor multiple teams within the same code, with Centrebet sponsoring no less than three NRL teams – the Dragons, Penrith Panthers and Manly Sea Eagles.
So to that degree, that also throws out the concept of brand loyalty! As a Dragons supporter, why would I lean toward Centrebet as my bookie of choice – surely one of the main aims of sport sponsorship – when they are also supporting two of our competition rivals?
One of the advantages, it must be said, is the innovation that stems from this form of free-market capitalism, with an influx of innovative “special offers” introduced over the course of the year – get your money back if your team doesn’t score, or if your team is up at half time, etc.
Hell, I think there’s even something in there about your next bet being free if your favourite player has an off day!
Then there is this beauty – a bookie donating money to a charity based on a bet between an opposing player and coach. Brilliant!
So whilst much of the negative publicity surrounding gambling and sports sponsorship seems to be based on Tom Waterhouse constantly popping his head up on Channel 9, in essence the issue is that the bookies are in your face everywhere you look, and Tom was just the tipping point.
The sports betting industry needs to learn a thing or two about sponsorship activation and loyalty. It should look at the age-old marketing tactic of product positioning, which allows you to be seen, but not necessarily heard, avoiding the in-your-face strategy it is currently employing which will only result in it drawing adverse attention to itself.
Or else Centrebet Stadium will go the way of the Winfield Cup (I’m sure you League fans out there remember it). Though not many people would shed a tear about the removal of gambling sponsorship from sport, except perhaps for when their team goes belly up.
This article originally appeared on SmartCompany where Nic Ferraro – founder and managing director of Sports Business Insider – features as a guest writer on the business side of sports. Connect with him on Twitter @NicolaFerraro.