White label sponsorship deals ‘under threat’ amid BC.Game scandal
Gambling minister Baroness Twycross warned further action could be taken against white label sponsorship deals last week.
Twycross, speaking at the GambleAware conference, said she was aware of the increasing prevalence of white label football sponsorship deals being used to advertise to consumers outside of Great Britain.
It follows a recent scandal involving offshore crypto casino and Leicester City shirt sponsor BC.Game, which ultimately withdrew its Curaçao gambling licence after being declared bankrupt ahead of the regulator’s imminent decision on the matter.
The minister said: “I am engaging with the Gambling Commission and industry to gather further evidence of their prevalence and impact. If further action is needed, we will take it.”
White label deals have historically involved an offshore gambling operator signing a deal with a company that specialises in providing licensed and branded sites for these companies, such as TGP Europe.
Under UK law, these brands are then able to sign sponsorship agreements with UK sports teams.
Some critics have accused these agreements of primarily being used to advertise to consumers outside of the UK in jurisdictions they would not legally be permitted to do so.
White label agreements at risk?
Partner at Northridge Law Melanie Ellis told NEXT.io Baroness Twycross’ comments indicate that current arrangements for white label operators could be “under threat”.
She outlined that when a brand enters a white label agreement with the intention of gaining permission to advertise in Great Britain, it is important that they ensure any other sites they operate do not allow access to British consumers.
This, Ellis said, can be achieved for example by redirecting traffic from their sites to the GC-licensed white label site.
She said: “Whilst such arrangements are lawful, the comments from Baroness Twycross reflect a growing sense that they represent something of a loophole if, in reality, the intention is to advertise the global brand via British football, rather than the GC-licensed site.
“This comes with the risk that, despite efforts to redirect British traffic to the [Gambling Commission]-licensed site, customers using a VPN may be able to access the unregulated gambling facilities offered under the same brand.”
Ellis argued that one possible outcome of this review is the introduction of laws and licence conditions that would restrict GC-licensed operators from entering into arrangements with companies providing gambling services to other jurisdictions under the same brand.
She added: “Or at least requiring rigorous due diligence as to the brand’s efforts to restrict access from British consumers.”
Despite BC.Game’s current licensing and bankruptcy issues, Leicester City again last week reiterated its support for its embattled sponsor.
The club said: “We remain in regular discussions with BC.Game with regard to its Curaçao-based dispute and continue to receive the strongest assurances that the process has no bearing on BC.Game’s financial standing or its international operations.”
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