Gambling Ads Continue To Power Illegal Streaming Industry

A European Commission drive to starve illegal streaming sites of advertising revenue is being stymied by a continual flow of cash from gambling adverts, even as many major brands honour an industry agreement to combat the practice.

Websites that violate intellectual property (IP) rights, in particular by rebroadcasting pay-TV feeds of live football, have become a significant thorn in the side of the media and sports industries.

The sites mostly generate cash from advertising, a large amount of which directs viewers to gambling operators.

Research by IP infringement tracking company White Bullet estimates that 43 percent of all branded advertising on IP infringing sites is for gambling, more than double the amount for the next largest segment.

In June 2018, a collection of organisations, including the European Gaming and Betting Association (EGBA), signed a memorandum of understanding (MoU) designed "to limit advertising on websites and mobile applications that infringe copyright or disseminate counterfeit goods".

White Bullet has been commissioned by the European Commission to track the progress of this MoU.

Data from the early stages of its report, seen by GamblingCompliance but not provided by the tracking firm, suggests that although major brands pulled away from IP infringing sites during the first quarter of 2019, the overall number of gambling ads has fallen by only 3 percent since the agreement was signed.

White Bullet defines "major brands" as those whose parent companies appear in one of six independent lists of large global businesses.

Of the major brands still advertising on IP infringing sites in the first quarter, the most prevalent by volume was Frankfurt-listed Bet-at-Home, ahead of GVC’s Bwin.

In data later provided to GamblingCompliance directly by White Bullet, Bwin also appeared second overall in a list of gambling ad impressions on piracy and illegal streaming websites in Europe during the past six months.

"GVC does not directly promote any of its brands on illegal streaming sites and is constantly reviewing and updating its affiliate relationships to try and prevent this type of activity," said Martin Lycka, the company’s head of regulatory affairs.

Bet-at-Home declined the opportunity to comment.

The vast majority of ads found alongside illicit sports streams are not placed directly by gambling companies. Most are placed by ad exchanges or networks on behalf of operators, while another large chunk is paid for by affiliates.

In terms of ad impressions, all other operators are, however, dwarfed by Russian bookmaker 1xBet, which White Bullet estimates has generated more than 35m impressions on piracy websites in Europe during the past six months, more than three times as much as Bwin in second place and Marathonbet in third.

European commissioner Harrie Temmink, who is leading the commission’s work on protecting intellectual property, said he was attempting to "stimulate an industry approach" to the problem and that the EU was taking a "follow the money" tactic to combating piracy.

At this stage, the commission is acting only as an intermediary on advertising, not an enforcer, but Temmink said that it would look to "confront the signatories with their own commitments" further down the line.

"They are not naive," he said of gambling firms, "they know their ads are on these streaming services."

The commission will use White Bullet’s report to conduct a review of the MoU on June 25, and up until at least that point Temmink said he and his colleagues "are not thinking about legislating anything".

To date, the EGBA is the only gambling industry signatory, but Temmink called on individual gambling companies to sign up.

White Bullet said that the first-quarter data seen by GamblingCompliance, although accurate, does not paint a full picture of the difference between the advertising landscape pre- and post-signing of the MoU. It’s one year report in June, it said, would provide a more complete story.

However, both Temmink and White Bullet CEO Peter Szyszko said they are buoyed by the progress shown so far by major brands in cutting down offending ads, but Szyszko added that industry engagement with the problem still varies wildly.

Although some operators are taking affirmative action to remove ads once they are flagged by tracking companies, others only do so for jurisdictions where they are licensed, while some make no effort at all, he said.

The same trichotomy is true of advertising companies and affiliates, he added.

Szyszko claimed that his company has the technology to pinpoint to an operator exactly which affiliates and advertising partners are placing the ads on sites that infringe IPs, target young people or feature adult content.

In the UK and many other jurisdictions, operators are held ultimately accountable for their marketing, even if it is placed by a third party.

The Gambling Commission’s licence condition 16.1.1 specifies that operators should "take all reasonable steps to ensure that third parties with whom they contract for the provision of any aspect of their business related to the licensed activities do not place digital advertisements on websites providing unauthorised access to copyrighted content".

In Sweden, a series of Videoslots ads found on teen-focused websites, which the operator said were placed by an ad network, recently earned the company a stern warning from the Swedish Consumer Agency.

In focus: Advertising