The “loophole” that allows foreign betting firms to advertise on English and Scottish football teams’ shirts and pitchside hoardings is likely to be scrapped as part of government plans to reduce gambling’s hold on the game. Ministers finalising a planned reform of gambling laws are expected to unveil their proposals within weeks, with an outright ban on betting company logos appearing on football shirts thought to be a strong possibility. The chief executive of the English Football League, which is sponsored by SkyBet, described the prospect on Thursday yesterday as “concerning”. The Guardian understands that ministers are also considering going beyond shirt sponsorship by taking aim at the controversial “white label” system used by overseas betting companies, chiefly from Asian countries such as China and Thailand, to strike lucrative sponsorship deals. These firms can gain access to English and Scottish football via partnerships with small companies that hold a British gambling licence, a requirement for firms that want to advertise in the UK. The “white label” firms, often based in jurisdictions such as the Isle of Man or Malta, effectively rent their licences to overseas brands, which can then market themselves via shirts and pitchside hoardings to fans in countries where gambling is illegal and cannot be advertised. The regime has raised concerns about the lack of transparency over who owns the companies displayed on the shirts of football clubs and how those companies operate. “It is a massive loophole,” said a source familiar with the review, adding that they would be “amazed” if the white label system survives. Banning white labels would stop these firms advertising on pitchside hoardings, which frequently display betting promotions in a variety of languages, as well as on shirts. But the Department for Digital, Culture, Media and Sport (DCMS) has also been weighing up whether to ban even UK-based firms from the front of football shirts, amid concern about the impact on children and vulnerable people. Gambling logos appear up to 700 times a match, according to recent research. But banning them would be “concerning” for the EFL, according to its chief executive, Trevor Birch, and could have a “substantial impact” on Football League finances. Currently nine of the 20 Premier League clubs have gambling companies as shirt sponsors, while six teams in the Championship do also. But the EFL’s title sponsorship is with SkyBet and the Football League has numerous other tie-ins with the gambling industry, which Birch estimates amounts to a total value of £40m a year. “We’re concerned because finance and sponsorship from the betting sector is an important part of the financing of the EFL,” Birch said. “The figure we would put on it is £40m. If that particular avenue is closed off to us it will have a substantial impact on our finances.” Reports suggest that an outright ban on gambling ads in football would be unlikely and Birch said that should the most stringent changes occur, new sponsorship opportunities would still arise. He did, however, argue that the gambling industry should make some financial contribution to football whatever the changes, given the sport’s importance to most bookmakers’ business models. “Life goes on and if it is a short-term hit we have to find an alternative. Who knows what else is out there in terms of sponsorship that might fill the gap?” Birch said. “But it’s also the case that the gambling industry does make an awful lot of money from football. So in some shape or form we think that they should be making some kind of contribution. It could be in a different form to shirt sponsorship.”