The Economic Committee of the National Assembly discussed the issue of banning any kind of advertising in the media featuring gambling, internet gambling, casino, totalizator, and their organizers. The legislators agree that this is a painful decision for businesses and it is important that it be balanced and transitioned.
Market losses in numbers
The main speaker, RA Deputy Minister of Finance Armen Hayrapetyan said during the sitting that they also studied the numbers presented by companies providing advertising services and that they are a bit exaggerated.
The media estimates their losses at 60-70%, but according to the analysis of the ministry, the media will lose 20-25% of its revenues due to gambling advertisements.
“We will give them the opportunity not to lose large incomes within our deadlines,” the deputy minister said during the discussion.
According to him, the share of gambling game advertisements is about 30-40% in the case of television, about 40-50% in the case of radio, Internet and outdoor advertising.
According to MP Babken Tunyan, the decision should not be delayed anymore, because “the pace of gambling continues to grow rapidly and it is necessary to reduce it.” According to him, all the concerns were discussed during the meeting with the media representatives, it is important that they have time to adapt.
Besides, Tunyan explains that the income of the media will not be reduced as much as it is presented, because gambling advertisements will be replaced by other advertisements.
In what cases will the advertising of lottery games be allowed?
Advertising for lottery games will be permitted in casinos, lotteries, internet gambling games, bookmakers (buildings, bookmaker’s office) in buildings, structures, halls, facades and official websites.
Advertising will also be allowed at RA border entry points, as well as in hotels with four or more stars.
Foreign clients and investors
Restrictions on gambling advertising apply to both the advertisee and the advertiser. The organizer of a gambling game with a foreign registration may not have advertisements on local websites, radio, or television, because the advertiser is also responsible before the law.
In the same way, a company with a local registration can not place its advertisement, for example, on foreign entertainment and other websites.
Foreign investors in the gambling sector in Armenia can no longer bypass this restriction. Although foreign investments are protected, according to the Deputy Minister, the national legislation in this regard also applies to them.
Competitive risks and regulations
During the session, the representative of the Commission for the Protection of Competition (CPC) mentioned that they have concerns, about whether the features of the blockade derive from the protection of the public interest and whether they are proportional to them.
According to the structure, unequal competition may arise, as the law applies only to the organization of gambling games of local organizations in the territory of the Republic of Armenia. But it is possible that the game organizer servers on the Internet are outside Armenia and not in the am domain.
The law, according to the CPC, does not regulate the field completely.
The regulation related to foreign companies is also ambiguous, will their advertising activity in Armenia be restricted by law?
In addition, there are still no mechanisms through which foreign advertisements on local websites will be controlled and, conversely, the advertising activities of local organizations on foreign websites.
The commission will examine the cases of unfair competition separately and if it finds that any TV company has changed its name or logo, there is a degree of confusion with the gaming provider and in other cases. As a result, the organization may be fined up to 5% of the previous year’s revenue.
Signal to the media field
Deputy Minister of Finance Hayrapetyan says that this is a signal to the local media that such financial dependence is dangerous for impartial media.
According to him, as a result of this restriction, the media will diversify their advertising sources.
The draft received a positive conclusion, although there is a need to amend it before the second reading.