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Draft law // Ban on the advertising of gambling in the media and online: Who would lose and who would win

10 July 2020
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The advertising of gambling, including lotteries and betting, on radio, television, in print media, online, and in other public places could be banned if the Parliament gives the green light to a draft law developed by the MP Dumitru Alaiba from the Action and Solidarity Party (PAS). Some experts believe that the ban will affect televisions, which could lose some of its revenue, while others point to monopoly and political interests in this field.

In the draft law registered in the Parliament on June 26, the MP proposed banning any form, direct or indirect, of advertising (promotion) aimed at promoting or stimulating all types of gambling (including betting on sporting events, lotteries, online gambling). The document also provides for sanctions for those who will place or broadcast advertising of gambling. Individuals or officials could be fined with MDL 3,000-6,000, while legal entities could be fined with up to MDL 9,000 and also be deprived of the right to carry out certain activities for a period of six months to one year.

In the explanatory note to the draft law, Dumitru Alaiba mentioned that gambling makes victims and causes addiction among the most vulnerable layers of society, including minors. He also referred to the opinion of psychologists, who consider gambling a disorder and not just an addiction that has a negative impact on the financial situation of players, too.
“The draft law will ensure a significant reduction in the harmful effect of gambling. People will be protected from the aggressive advertising of the businesses that organize, conduct, or operate gambling activities and, therefore, will not be tempted to spend money on these games, but will redirect them to other investments beneficial to their families of businesses,” the MP said in the document.

POLITICAL AND ECONOMIC INTERESTS

Currently, the main provider of advertising in the field of gambling in our country is the National Lottery of Moldova (NLM), a monopolist based on a public-private partnership between the Public Property Agency and a company controlled by Bulgarian businessmen, with the involvement of several companies with offshore roots.

The author of the latest draft law on advertising, the lawyer Eugeniu Ribca, noted that Moldova had no bans on gambling until 2016, when the former leader of the Democratic Party, Vladimir Plahotniuc, in a press conference came up with the proposal to ban the advertising of such activities, followed by the monopolization of this field. “In the process of work on the Code of Audiovisual Media Services we were warned by MPs not to touch gambling. Later, I realized what that warning meant, when Bulgarian businessmen took over the gambling business in Moldova,” Eugeniu Ribca added.

The expert drew attention to the fact that gambling comes with a lot of advertising on TV and, in particular, on the stations of the “former-current media holding of Plahotniuc,” which leads him to believe that there are also political interests in this regard, not just social and economic.

He also believes that the document registered in the Parliament must be subjected to public debate, as total bans on the advertising of gambling could be described as “abusive.” “Some materials in the media stated that, in addition to the Covid-19 pandemic, we have a real gambling pandemic, with lots of people being involved with exorbitant amounts, leading to economic and social havoc,” Ribca noted.

HOW MUCH THE NATIONAL LOTTERY SPENT ON ADVERTISING LAST YEAR

Galina Zablovscaia, the executive director of the Association of Advertising Agencies (AAA), believes that the proposed bans are appropriate, but she noted that the televisions that broadcast NLM’s advertising will lose this revenue.

She estimates that the National Lottery of Moldova, according to available data, spent about EUR 400,000 in 2019 for advertising on Moldovan televisions (the total volume of the advertising market in Moldova making about EUR 14 million in 2018). “However, I cannot say that this money was given directly to televisions,” she noted, specifying that the money cycle involves an advertising agency that is part of the Casa Media sales house.

On the other hand, she warns that there are no mechanisms to counter the penetrating advertising of online casinos (advertisements broadcast in Moldova, but paid in another country), massively present in our country. According to her, “if MPs want to ban anything, they should also think about how this mechanism could be implemented. For example, if targeted casino advertising for Moldova were to appear on a website in Belgium, our authorities would not be able to restrict access to advertising.”

ADVERTISING BUDGETS COULD MIGRATE ONLINE

“It is easy to ban advertising. The problem is to control compliance with these prohibitions. If the appearance of unwanted TV, radio, outdoor, or print advertising can be regulated, then the ban on gambling advertising online is impossible,” says the commercial director of Casa Media, Octavian Hanganu. In his opinion, the ban will most likely lead to the redistribution of advertising budgets to Google, Facebook, and other online entities.

He points out that the National Lottery is one of the top three customers on the market, especially in the current situation of health and economic crisis.


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Octavian Hanganu also believes that proposals to amend the advertising law should be debated publicly in order to analyze their impact on the Moldovan media. “Especially since public discussions on the new wording of the advertising law have taken place and the law has been waiting to be voted on, it might be useful to repeat the debates to update it,” Hanganu said.

MONOPOLY ON THE MARKET

According to the report of the TV MR MLD audience measurement for May 2020, the National Lottery had the longest broadcast time on the monitored TV stations, compared to other advertising providers, with a share of almost 20%.

The National Lottery of Moldova (NLM) belongs entirely to the Public Property Agency (PPA) and is an official state monopoly, with permission to organize lotteries and gambling. The contract with the PPA regarding the public-private partnership for the development of NLM activities was signed in May 2018 by NGM Company, founded in Chisinau on April 12, 2018 by NGM SPC LIMITED from Dubai. Under the conditions of the partnership, 75% of the lottery revenue should be collected by the state company, and 25% by investors.


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According to Ziarul de Garda, NGM SPC Limited was registered on February 18, 2018 in Dubai, United Arab Emirates, one of the most famous tax havens or jurisdictions that protect tax secrecy. According to Dubai International Financial Center (www.difc.ae), the company has three directors – Stephanie Amabao, Jedrek Jovellanos, Plamen Stefanov Milanov, and two founders – National Lottery AD and New Games AD, Bulgarian companies that manage the Bulgarian national lottery and other gambling in that country. Both companies are in the portfolio of Bulgarian businessman Vasil Bojkov, one of Bulgaria’s richest citizens.

The National Lottery of Moldova did not respond to Media Azi’s requests to comment on the draft law.

 

Foto: alaiba.md