Sponsorship as an example of effective regulation in the gambling sector

Currently, Ukrainian legislation imposes significant restrictions on gambling advertising. Legal gambling operators are forced to operate within a rigid framework in which, unfortunately, prohibitions far outweigh opportunities. This places them at a disadvantage compared to illegal operators, who use any advertising methods — both online and offline — without regard to restrictions.

However, examples of reasonable regulation do exist. One such example is how the law permits gambling companies to officially sponsor sporting events.

For the legal gambling market in Ukraine to finally operate at full capacity, it is necessary to move away from the logic of “prohibit everything.” Prohibiting something is much easier than regulating it; however, “easier” does not always mean “better.” Any administrative ban effectively “cuts off oxygen” to businesses, forcing them either to forgo part of their profits or to resort to grey operating methods. As a result, no one benefits — the state loses budget revenues, businesses lose profits and development opportunities, and consumers lose access to products and services.

Unfortunately, legal gambling in Ukraine is a prime example of excessive prohibitions, particularly in the field of advertising. Undoubtedly, a strict approach to advertising has its logic, as the state seeks to limit the spread of gambling addiction, and advertising is the tool that attracts players. However, the advertising legislation still contains examples of reasonable regulation in certain areas which, against the backdrop of widespread bans, appear far more rational for the legal gambling sector. Sponsorship is one such example.

On the one hand, Ukrainian legislation prohibits gambling operators from sponsoring public events; on the other hand, it allows them to sponsor sporting events. Specifically, the law states: “The use of trademarks and other intellectual property objects under which gambling activities are conducted is prohibited in sponsorship. Business entities holding a license to organize and conduct gambling activities may not act as sponsors.” At the same time, it also provides: “The provisions of paragraph one of this part do not apply to sponsorship in the field of physical culture and sports (except children’s and youth sports), namely sponsorship of sports teams, athletes, sporting events and competitions, as well as broadcasts of sporting events and competitions…”

This very approach is more appropriate for building an effective regulatory framework — where restrictions exist within each specific segment rather than imposing a total ban. In this way, businesses retain space to operate and realize their potential. This approach should be expanded, particularly considering the existence of specialized gambling exhibitions, conferences, round tables, and other industry events. Why should gambling companies not be allowed to sponsor them?

For example, the international gambling exhibition ICE is one of the largest and most influential annual events in the gambling industry, attended by hundreds of companies connected to the sector. If a similar event were to take place in Ukraine, why should Ukrainian gambling companies be prohibited from sponsoring it simply because such a ban is written into the legislation?

Thus, building an effective regulatory system is not about multiplying prohibitions, but about rational segmentation of all aspects of the gambling business. Such an approach would create additional opportunities for the development of the gambling industry and help find a balance between the state’s desire to “prohibit and protect” and businesses’ aspiration to “earn and grow.”