With gambling advertising on television reported to be outlawed within two years, the television networks are watching the developments with caution, recently calling on the government to slash spectrum fees in order to help make up some of the lost revenue if such a ban is enacted.
Free TV CEO Bridget Fair said that the industry body has consistently called for the removal of spectrum fees – formally known as the Commercial Broadcasting Tax (CBT) - which costs the television industry $46 million per year.
“On introduction, the government of the day committed to reviewing the tax within five years, but this has never happened,” she said.
“While the issue has resurfaced in the context of the discussion around the impact of the gambling advertising restrictions, there is a strong case for repeal of this unjustifiable tax, independent of the current debate.”
Spectrum fees were introduced in 2017 to replace broadcast licence fees and are charged by the government for the use of frequency spectrum for commercial broadcasting.
In a document released at the time of its introduction, the Department of the Communications and the Arts said that commercial broadcasters had up until that point been paying a "very small amount" compared to the value of the spectrum they actually use – about $75,000 per year.
"Under the Commercial Broadcasting (Tax) Act 2017, broadcasters will pay for the spectrum they use at a level more reflective of its value. The broadcasters will pay for each spectrum transmitter they use. Higher value transmitters will attract a higher fee," the paper said.
Fair said that the transmitter tax is an arbitrary impost on commercial broadcasters, on top of other corporate taxes, that is not paid by any of TV’s competitors such as multinational digital platforms and streaming services.
“No other country in the world taxes its free broadcasters in this way,” she told AdNews.
“The CBT is a made-up tax that has no relationship to spectrum usage or value; it simply operates to reduce the money available to spend on local content available free to every Australian.”
Commercial broadcasters spend more than $1.67 billion every year on Australian content, with that figure going towards a mix of news, free sport and Australian drama and entertainment programming.
With the latest research from ACMA showing two-thirds (68%) of spend by gambling advertisers is on free-to-air TV markets ($133m on metro and $29m on regional) - and analysts estimating gambling ads make up around 6%, or $180 million, of TV’s total ad revenues - Fair said that the conversation now is what measures the government will implement to reduce the potential impact on Australian content, sports rights and the jobs of people working in the sector.
“While axing the CBT won’t even come close to balancing the impact of the proposed restrictions, it should be the first cab off the rank in a range of measures to address the future sustainability of the industry,” she said.
Orange Line’s head of media, Gavin Chew (pictured right), said that with the government trying to better regulate the industry for years with varying degrees of success, especially with the advent of digital marketing for the sector, gaming and gambling companies continue to find clever ways around it as long as there is consumer demand.
“Just look at the T&Cs around bonus bets, and the steps customers will (willingly) go through to get a little extra value in their betting experience,” he said.
“Try typing the name of a sports betting company into Google and you will almost definitely see something like ‘sign up bonus’ as one of the top predictive suggestions.”
Chew said that he believes as much that can be reasonably done around gambling advertising is being done, short of outright restrictions, a move that some research shows is unfavourable with the public.
Recent research by Freshwater Strategy revealed that over half (56%) of Australians support moderate restrictions on gambling advertising online over a blanket ban (37%).
A previous AFR Freshwater Poll found that 70% of voters prefer options that limit the number of gambling ads on TV, and the time during which they can be seen, over a blanket advertising ban.
“Most platforms have limitations for advertisers in this sector, such as stricter targeting and messaging controls,” he told AdNews.
“Continuous strengthening of regulations that correlate with consumer demand and sentiment will be required alongside this, as data in 2023 showed increased expenditure in most forms of gambling and gaming."
Advertising on gambling in Australia has grown by around 13% compound a year over the last 15 years, going to $300 million in 2022 from $53 million in 2007, according to analysis by investment bank Morgan Stanley.
An estimated 50%-60% of that went to free-to-air television, 20% to digital, 10% to radio, 5% to outdoor and the rest to print and cinema.
Chew said that whether it can be curbed is questionable due to the strength of lobby groups and certain players in the market.
“Whether it should be is a bigger question with further reaching ramifications,” he said.
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