Restrictions on alcohol, gambling and tobacco advertising

New laws in several European countries which restrict the advertising of alcohol, gambling and tobacco are threatening to impact on the tradition of businesses in these sectors sponsoring sports events, teams and individuals.

In our Winter 2008 e-bulletin we reported that the sixteen federal German states had met towards the end of 2006 to agree on new legislation that would effectively outlaw all online gambling in Germany in order to protect the betting monopoly of Oddset (the state betting organisation). On 1 January this year these states enacted a treaty which banned all forms of internet betting and protects the state gambling monopoly until at least 2011.

The new treaty has forced online betting company Bwin to end its sponsorship deal with one of Germany's leading football clubs, VfB Stuttgart. It has been reported that Bwin was paying Stuttgart around €1million per year for the sponsorship rights. Stuttgart, with the backing of DFL, the German Football League, commenced a legal challenge against the treaty on the basis that it is incompatible with both German state and European law. The administrative court in Stuttgart refused to give a ruling on the case, albeit stating that 'it continues to hold the legal opinion that forbidding private sports betting is not in line with European law'.

The European Commission has in turn threatened to commence action against the German legislators in respect of the possible impact of such legislation in restricting cross-border betting services, as the position of foreign teams who have sponsorship deals with online gambling sponsors (for example, Bwin currently has shirt sponsorship deals with Real Madrid and AC Milan) who visit German teams in European sports tournaments is unclear. In anticipation of the treaty, Bwin had reduced its sponsorship budget within the German territories by €40 million (Bwin also held partnership contracts with Borussia Dortmund and VFL Bochum). Stuttgart fears that Bwin has re-allocated its budget to other properties such as Real Madrid and AC Milan.

In France, broadcasters have been prevented from showing tobacco advertising during repeat and highlights programmes of motor sports events following a ruling by the French broadcast regulator, the Conseil Supérieur d'Audiovisuel (CSA). In February, the CSA issued a judgment permitting tobacco advertisements to be broadcast during live motor races only and ruled that tobacco advertising must be edited out of delayed broadcasts.

Meanwhile, in the UK, the fourth edition of the Code of Practice on the Naming, Packaging and Promotion of Alcoholic Drinks has prohibited alcohol branding from appearing on children's replica shirts. The rule was established by the Portman Group, the representative body of the leading drinks manufacturers, which presides over the Code. The rule applies to all shirt sponsorship deals entered into by sports clubs after 1 January 2008. Danish brewer Carlsberg (the current shirt sponsor for Liverpool, Glasgow Celtic and Glasgow Rangers football clubs) has already voluntarily removed its branding from children's replica kits.