September 18: Brazilian soccer has launched a concerted defense of the country’s regulated betting market, warning that government plans to crack down on online gambling could put around R$1 billion (£140m/$188m) in club sponsorship revenue at risk.
The reaction following reports that the government of President Luiz Inácio Lula da Silva is preparing a provisional measure aimed at the sector.
The latest proposal does not want to completely ban sports betting. Reuters reported that the current plan would ban online casino games and leave intact sponsorship and sports betting deals with clubs and competitions.
Gambling and online casino products are generally run by the same companies, and the National Lottery and Gaming Association says casino games account for about 75% of operators’ revenue. Any major success on that side of the business would leave less money available for sponsorship and advertising.
Thirteen of Brazil’s top 20 clubs (65%) currently have a betting company as their main shirt sponsor, with an estimated R$1 billion ($194 million) in direct sponsorship revenue potentially affected.
The impact is also expected to extend further into broadcast advertising, competition sponsorship and the lower divisions, where replacing betting money would be much more of a headache.
Officials from clubs and state federations met on Thursday before publishing the coordinated manifesto advocating regulation of the ban. Flamengo, Vasco da Gama, Fluminense and Botafogo led the charge, each of which was represented in the discussions in Rio along with the betting companies.
The statement acknowledges the social harm associated with gambling, which is the main reason for the market slowdown, but calls for stronger education, oversight and protection for vulnerable consumers as a solution.
Where football disagrees with the government is how far this response should go, it argues that licensed companies can at least be monitored, taxed and subject to consumer protection and integrity rules, while a sharp contraction of the legal market could push Brazilian business into the hands of offshore operators.
The football lobby warns the fallout could be “a fatal blow to Brazilian football”, claiming some clubs could be pushed into insolvency.
His closing line is even more forceful: “If the regulated market ends, betting doesn’t. Football does.”
The government’s argument focuses on the rapid growth of spending on gambling and its impact on households. Brazil’s finance ministry estimates that Brazilians spend around R$60 billion ($11.6 billion) a year on gambling, insisting they are responding to concerns about debt and addiction.
There is also a legal headache in the background. Operators paid for licenses covering both sports betting and online casino products, and industry representatives have warned that removing one of those activities so soon after regulation could lead to some compensation complications.
The truth is that Brazilian football has become deeply tied to betting money in a very short period. Ultimately, the government may leave sports sponsorship untouched, but clubs point out that if their sponsors lose a significant part of their business, football will feel it anyway.
Contact the writer of this story, Harry Ewing, at (email protected)
