International edition
March 20, 2019

The ban will come into effect in 2019

Italy bans sports gambling advertising

Italy bans sports gambling advertising
The bill will propose a new and comprehensive framework for the regulation and licensing of gambling in Ireland. A new regulatory body would be established under the plans.
United Kingdom | 08/08/2018

The bill will propose a new and comprehensive framework for the regulation and licensing of gambling in Ireland. A new regulatory body would be established under the plans. In this regard, Paddy Power CEO Peter Jackson commented on why Italy's current ban on sports gambling advertising is 'unnecessary'.

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If I had my way, I wouldn't have advertising or any access to gambling platforms in sport at all," said President Michael D Higgins last month.

The betting giant says it will abide by whatever laws are in place, but boss Peter Jackson said: "We've been a very good supporter of responsible gambling in Ireland.

"We would like to see some progress made on the [gambling control] bill. We will operate within the framework that's put in place - that countries and politicians decide."

The Gambling Control Bill is still being drafted by the Department of Justice, although proposals were laid down in 2013. The bill will propose a new and comprehensive framework for the regulation and licensing of gambling in Ireland. A new regulatory body would be established under the plans.

Last month, Italy approved a ban on gambling advertising that comes into effect next year.

"Some countries chose to put in place very restrictive legislation," said Mr Jackson. "We've just seen that in Italy, where advertising is effectively going to be banned. I'm not sure that necessarily is the right answer," he added. 

The World Cup helped to lift Paddy's profits for the period, but its shares slumped as much as 7.1pc as it predicted that its underlying, full-year earnings will be hit by additional taxes in Australia and the inclusion of losses from its recently acquired US-based FanDuel sports business. Its first-half revenue rose 7pc in constant currency terms to USD 1 billion, while its pre-tax profit was 4pc higher at USD 140m.

The group, which has been focusing on reinvigorating its Paddy Power brand, said that the World Cup accounted for USD 33m of its total first-half revenue. But the group's total revenue from the World Cup, which ended after the Paddy Power Betfair's second quarter finished, was USD 58m. The tournament generated a USD 10m profit for the gambling group.

Paddy Power Betfair said it expects its full-year, underlying earnings before interest, tax, depreciation and amortisation, without taking account of its US sports betting, to be between USD 593m and USD 619m.

Paddy Power Betfair CEO Peter Jackson thinks the measure is 'unnecessary'

Additionally, Paddy Power Betfair's CEO Peter Jackson has recently commented on Italy's approval of sports gambling ad bans, regarding it as "not necessarily the right thing to do."

Jackson said changes to the FTSE 100 company’s full-year projections were partly a result of changes to the Australian tax regime, and partly connected with Paddy Power Betfair’s USD997m takeover of US fantasy sports company FanDuel.

June’s football World Cup netted Paddy Power Betfair an extra USD28m in revenue and USD10m in profit, and CEO Peter Jackson has insisted the betting giant is getting “its mojo back” thanks to the World Cup which, despite headwinds in the US and Australia, netted Paddy Power Betfair an extra USD28m in revenue and USD10m in profit.

The bookmaker disappointed investors on Wednesday as half-year revenue growth missed expectations and full-year earnings guidance was trimmed by around USD16m.

Mr Jackson said the tournament had allowed Paddy Power to “showcase our business” with a range of more risque advertisements. The company signalled plans to beef up marketing spend in March after losing market share. The World Cup campaign included a pledge to donate USD13,000 to an LGBT charity for every goal scored by Russia, a country that has been criticised for implementing so-called “anti-gay” laws.

“I don’t know who has a hotline to Putin, but whoever arranged for the 5-0 thumping of Saudi Arabia in the first match couldn’t have given us a better start to the tournament,” said Mr Jackson. “We are very pleased in the way the World Cup performed for us... I would say that Paddy Power has got its mojo back.”

Investors were disappointed, however, as the 5pc growth in half-year revenue missed expectations. Profit before tax for the six months to June was 4pc higher at USD137m. Full-year earnings guidance, meanwhile, was trimmed from a mid-point of USD625m to USD608m.

Investec analyst Alistair Ross labelled Paddy Power Betfair’s half-year performance as a “solid miss”, adding that online growth of 5pc lagged his expectation of a 9.9pc increase.

Ed Monk, an associate director at Fidelity Personal Investing said although second-quarter revenue was 13pc higher, the bookmaker’s revenue was up 9pc before the World Cup started.

He added: “Paddy Power Betfair stands to gain from the opening up of US betting markets, confirmed earlier this year, and has moved quickly to expand its FanDuel site to capitalise. That benefit, though, now appears to be priced into the shares and investors will want to see improved operational performance and a return to growing market share from here.”

 

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