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Curbs on online betting ads: What led the government to issue another advisory?
- Rohit Agarwal
Betting platforms spend thousands of crores every year on advertising targeting Indians. The government has warned against the financial and socio-economic risk posed by these platforms, especially their impact on youth and children.
High ad spends, as well as rampant marketing across TV and digital media are behind the Ministry of Information and Broadcasting issuing a second advisory on online betting ads in four months, say experts.
Betting platforms in India spend thousands of crores every year on advertising and this has led to another warning from the government, said Lokesh Suji, Director, Esports Federation of India, and Vice President of the Asian Esports Federation (AESF).
Online betting platforms spend Rs 3,500 crore annually on ads across TV and digital media, said Roland Landers, CEO, All India Gaming Federation (AIGF). He said that marketing expenditure can go up to Rs 5,000 crore, including spends on sponsorships and influencer marketing.
In the last six months, Rs 1,000 crore was spent on influencer marketing by online betting platforms, along with trading app Binomo, said Shahir Muneer, Founder and Director of Divo, a digital entertainment company. He said that online betting platforms are among the top 50 brands spending on influencers and compete with top brands such as Amazon and Byju’s.
Landers said that betting platforms focus much of their advertising on broadcasts of live cricket, kabaddi and football events.
Betting platforms are major spenders in the current advertising market when it comes to sports properties and account for more than 20 percent of the overall ad spend, noted Suji. “As these platforms make up most of the ads that are displayed during almost all major sports in India, a drop in marketing spends by these brands will impact ad revenues of sports properties,” he added.
Suji estimates that there will be an impact of less than 10 percent on overall advertising expenditure in case betting platforms cut down ad spends.
However, some marketers note that ad expenditure (ADEX) by betting platforms is not taken into consideration in India’s total ADEX, which stood at around Rs 74,000 crore last year, according to a Pitch Madison 2022 report.
Riding on celebrities and influencers
After sports, the betting apps’ second-highest ad spend is on celebrity endorsements and influencer marketing, said Rohit Agarwal, Founder & Director, Alpha Zegus, a gaming and lifestyle marketing agency.
Online betting platforms, which rely on surrogate advertising as most of them are illegal in India, operate as sports news portals. For instance, betting app FairPlay has FairPlay News and Parimatch has Parimatch News. And these platforms have roped in big names in the last few years to promote their brands.
FairPlay News has Bollywood and sports celebrities, including Ranbir Kapoor, Kiara Advani, Saina Nehwal, Mary Kom and Mithali Raj, endorsing the brand. Parimatch news has in the last two years roped in Dinesh Karthik and Elli Avrram as brand ambassadors.
Pointing to the strong spending power the betting apps have as they are located offshore, paying no taxes in India, Landers said that they have now directly started sponsoring teams and sporting events, including the Indian Premier League (IPL) and Pro Kabaddi League (PKL).
“These betting platforms are spending a lot of money on advertising to target Indian consumers,” he said.
Suji added that the betting sites have been promoting themselves in the name of gaming.
Landers pointed out that consumers may not be aware of the legal differences between skill-based gaming and illegal gambling and this is often exploited by offshore gambling websites to draw Indian users to their platforms.
There were 390 million gamers in India last year, and this is expected to increase to over 450 million by 2023, said an EY 2022 report.
Betting platforms pose a financial and socio-economic risk for consumers, which was noted in the government’s recent advisory, said Landers. They can be controlled by cutting the outflow of money to them from India, and preventing advertising targeting Indian consumers, he added.
However, there could be issues in compliance with the Government’s directives. “Hence, more stringent sanctions against this kind of advertising will be necessary, Landers added.
