Betting ads crackdown: Rs 4000 crore loss in AdEx expected

Industry observers note betting apps are one of the top advertisers, especially during big sporting events in India; MIB crackdown on betting ads expected to deal a big blow to celebrity endorsers too

e4m by Kanchan Srivastava
Published: Oct 7, 2022 8:56 AM  | 5 min read
Betting

The row around surrogate advertising refuses to subside. This time offshore betting companies, allegedly masquerading as sports news platforms in India, have come under the scanner.

The Ministry of Information & Broadcasting (MIB)’s latest advisory, the second time in four months, says OTT, TV and other media platforms must refrain from promoting offshore gambling platforms through surrogate ads or be ready to face penal action.

The MIB has also named some offshore platforms like Fairplay News, PariMatch, Betway, Wolf 777 and 1xBet for allegedly indulging in surrogate advertisements to promote gambling in India even as gambling is prohibited in most of the country.

According to an estimate by the All India Gaming Federation (AIGF), the illegal offshore gambling business has grown into a Rs 5 lakh crore business in India.

Their ad blitzkrieg runs into hundreds of crores. Roland Landers, CEO of the AIGF pegs the figure at Rs 3,500 crore annually. 

Landers told e4m, “These gambling sites are spending at least Rs 3,500 crore annually in advertisements and promotions. They are in direct touch with the TV and OTT channels pumping huge ad money to lure youngsters into making quick money through gambling." 

To put in perspective, the Indian gaming sector AdEx is estimated to be Rs 2,000 crore, as per AIGF.  

Besides, these firms are spending another Rs 500 crore on celebrity endorsers and influencers, taking the total AdEx in the sector to nearly Rs 4,000 crore, Landers further said. 

Shanu Jain, Vice President - Media Planning & Strategy, Dentsu Creative India, echoes Landers' sentiments. “Betting apps are one of the top advertisers during any big sporting events in India, contributing anywhere between 20-25 per cent to the overall spends. We will see an estimated impact of 5-7 per cent impact on India’s overall AdEx if betting apps are not allowed to advertise.”

India’s total advertising expenditure in 2021 was Rs 74,000 crore. As per Jain’s guess, the ad industry is set to lose Rs 3,700 crore to Rs 5,180 crore annually, if the government is able to curb the betting ads.

Many experts admitted that MIB's move may lead to a significant loss of AdEx although they pegged it at Rs 1,000 crore. 

Betting ads are not included as a category in the AdEx surveys conducted by the leading ad agencies. The government, too, has never shared any data on this. Landers points out, “No action has been taken against erring platforms so far which further leaves room for speculations.”

If betting platforms also include the likes of Dream11 and others on the Real Money Gaming side (RMG), then its impact will be more, says Karan Taurani SVP, Elara Capital.

Top celebrity endorsers

Actors Ranbir Kapoor and Kiara Advani, boxer Mary Kom, shuttler Saina Nehwal, and international cricketers like Mithali Raj, Sunil Narine, and Eoin Morgan were among celebs who endorsed FairPlay news. 

“FairPlay News is one of the most comprehensive news network organizations, with exclusive access to various sports activities and sporting events,” reads the brand’s Instagram bio (https://www.instagram.com/fairplay_news/).

However, its parent site FairPlay is an online betting site where you can stake your money on sports such as cricket, football, tennis, and events like horse racing and teen-patti.

Similarly, cricketers Yuvraj Singh and Suresh Raina endorse 1xBet sports blog whose ads were spotted on TV screens during the Asia Cup cricket tournament early this year. 1xBet has been blacklisted in many countries and many football clubs have terminated their sponsorship contracts with the firm, Indian Express reported earlier this year.

The MIB has also found that the logos of surrogate news websites bear striking resemblance to betting platforms. Moreover, the ministry has stated that neither the betting platforms nor the news websites are registered under any legal authority in India.

Sports & news route

Sports programming and some news portals are said to be lending betting players a good reach. For instance, Parimatch News is the integrated partner of Vivo Pro Kabaddi, and has also signed a sponsorship deal with Rajasthan Warriors, one of the six teams in the Ultimate Kho Kho league.

A leading OTT platform is earning over 80 percent of its revenue through surrogate ads of betting platforms only, a highly placed source in the media said.

“Sports channels, both TV and OTT, generally belong to big networks. They are expected to do due diligence before running any content on their platforms. On the contrary, they are collecting ad revenue from betting companies by directly dealing with them. If you investigate further, you may unearth the scam,” Landers says.

On the other hand, Jain notes that betting apps are designed to make people bet on the highly engaging live games on OTT channels, hence the most relevant placement for them to go for, said Jain.

Considering the sports genre across OTT channels has the highest reach, this becomes the perfect platform for them to advertise on, she further said.

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