The regulation of Bets (sports betting) in Brazil, scheduled for 2025, should significantly transform the sponsorship scenario for football clubs. This movement will bring a new dynamic to the market, affecting the million-dollar investments that have been the hallmark of recent seasons

The current influence of bookmakers on sponsorship

Many of these companies occupy the master position, displaying their brands in the most prominent place on athletes’ shirts.

This predominance is due, in part, to the high value of investments by betting companies, which have significantly exceeded those of brands in other sectors.

A clear example of this dynamic was the replacement of Galera.bet by Pixbet as sponsor of Corinthians in 2022, following a more advantageous financial proposal. However, these high investments are characterized by great volatility, which may change with regulation.

Expected impacts with betting regulation

With the introduction of new rules, betting companies are expected to face additional costs, such as paying for grants to operate. This should drive away less solid companies, reducing the number of competitors in the sports advertising market.

Sector analysts indicate that the outflow of money currently observed should decrease, making investments more sustainable and less volatile.

The Other side of the coin

The regulation of online betting in Brazil is a challenge, as the advancement of this type of game is much faster than the legislative process. Bets, or as they are known, sportsbooks, are associated, almost all of them, with football games, which is the main sport in several nations.

But the end of regularization in the country is coming to an end and regularized games are scheduled to start in January 2025.

Sportsbooks can generate billions of reais in taxes

But why is regulation so important? When regularizing an activity, the government can monitor and collect taxes. So, betting houses can generate billions of reais in revenue, in addition to creating jobs and new businesses.

Therefore, global corporations end up incorporating small companies in the online betting sector, attracted by the business potential of the Brazilian market.

According to the Statista data platform, online betting:

- They could generate up to US$45 billion in 2024

- The projection is to reach US$65.1 billion in 2029

- Annual business growth would be 7.4%

In Brazil, consultancies estimate that online betting totaled R$120 billion in 2023, with a projection of reaching R$150 billion in 2024, according to Ricardo Bianco Rosada.

The number of companies operating in the country is imprecise, varying between 200 and 1,200, depending on the source. Regulation will allow a number closer to reality, making the market more attractive for companies.

In Ecuador, there are currently seven companies with a Single Taxpayer Registry (RUC) registered as sports forecasting platforms in the registry of the Internal Revenue Service (SRI), the tax administration reported.

With the Economic Efficiency Law, in force since December 2023, a single tax regime was established that requires any sports forecast operator that wants to carry out its activity in the country to register in the SRI registry and pay the tax.

From yesterday, sports prediction sites must pay tax in Ecuador.

Of the group of seven companies registered in the SRI registry, five are established in Ecuador and two are foreign operators that have registered in the country with a RUC, through their representative, detailed the SRI.

There would be at least 48 companies dedicated to this activity. However, they are difficult to track, since most do not register RUC under their commercial name or with the economic activity they actually carry out.

The sanctions and corrective measures may be imposed from the end of December 2024, since Executive Decree 313, of June 27, gave a period of six months to implement the necessary mechanisms for the imposition of these measures.

Named “Bancas de apuestas”,without fear of mistake, the Dominican Republic occupies first place in terms of the number of existing lottery and sports betting banks; the majority are not legalized, nor do they pay taxes to the State due to the lack of surveillance and control.

More and more continue to be established, given the ease with which they are authorized, due to the way they are established and operate, violating all legal regulations. Many of these operate as points of sale with the same name throughout the national territory, as if they were commercial franchises. It is estimated that there are more than 75,000 lottery and sports betting banks established in the country with a population of 11´500,000; since everything is played and bet on everything here and they do not issue any type of information to the organizations that control it.

Every time the number of national and international lotteries is increasing and there is no limit to them. At this time when the submission of a comprehensive tax reform is being contemplated, we believe it is convenient to take advantage of the opportunity for these to be regularized so that they pay the corresponding taxes, avoiding the great evasion that exists in this sector.

The National Congress is filled with legislators who have many lottery and betting banks, who have made great fortunes that have made it easier for them to obtain a seat and do everything possible to ensure that they are not regulated.

The benefits generated by this business are estimated at more than 20 billion pesos annually, which is not properly regularized or controlled by the Ministry of Finance, since it exercises very little surveillance and supervision.

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The proliferation of illegal pages and the advertising of legal platforms, in the spotlight. There are six active government-authorized licenses.

After having granted seven licenses in recent years for the exploitation of online gambling in the Buenos Aires territory, the provincial government announced this week that it will begin to implement new regulations for legal activity and more tools to attack illegal platforms that, as they noted, they comprise 80% of the sector.

Different officials warned about the advance of gambling among adolescents along with the increasingly strong proliferation of platforms. Promote regulation of advertising.

Argentina also attacks influencers who promote betting.

“We must distinguish between legal and illegal gambling. Perhaps that difference is not so clear when it comes to advertising, but legal gambling is strongly regulated and also generates income for the provincial State that allows progress in health, education, and community development,”

The weekly press conference held every Monday by the provincial government was focused this Monday on a battery of measures that are planned to be taken taking into account a strong advance in adolescent gambling associated with the arrival of legal online gambling - enabled a few years ago in the Province by virtue of the financing it provides - and also to the proliferation of numerous illegal platforms, such as those that, for example, were disrupted months ago in Mar del Plata.

Here all conference

The Minister of Government, Carlos Bianco, was accompanied for the announcements by the Ministers of Health, Nicolás Kreplak, of Education, Alberto Sileoni; and Security, Javier Alonso, as well as the president of the Lottery and Casino Institute, Gonzalo Atanasof. Initially, at the conference, officials drew up a diagnosis based on a digital well-being survey carried out by the Ministry of Health on 434 students from schools in seven Buenos Aires districts.

Among the results, it was highlighted that 22.4% said they use their cell phone for more than eight hours a day, and that 26% responded that they do so between five and eight hours, while 34% of the total number of respondents stated that they have bet at least once on online platforms and that 12.4% responded that they bet many times.

THE ONLINE GAME THE PROVINCE

Online gaming in the Province of Buenos Aires was enabled by the Tax Law that was approved by the 2019 Budget under the administration of María Eugenia Vidal and it was the government of Axel Kicillof that, since the end of 2020, began the path to the granting of the seven licenses enabled by the regulations.

In a resolution signed on December 29, 2020, the Provincial Institute of Lotteries and Casinos granted the license for the development of online gaming to the following companies:

- Argenbingo SA – Will Hill Limited SA Argentina Branch (UT) • Hillside (New Media Malta) PLC – Pasteko SA (UT)

 - Hotel Casino Tandil SA – Dynamo Tyche SA – Playtech Software Limited (UT)

 - Cassava Enterprises (Gibraltar) Limited – Boldt SA (UT)

 - Atlántica de Juegos SA – Stars Interactive Limited (UT)

 - Binbaires SA – Intralot International Limited (UT) • Casino Victoria SA – Betsson Malta Holding Limited (UT).

These are all temporary unions of companies taking into account that the law established that the exploitation of online gambling can be carried out “by human or legal persons, public or private entities with domicile established in the Province of Buenos Aires” and provided that “in In the case of foreign legal entities, they may only be presented under the form of Transitory Business Union (UTE) with another national legal entity and provided that the latter has a shareholding of no less than 15% with respect to the former.

“It is a fairly widespread phenomenon among our adolescents,” said Bianco in conclusion to the diagnosis made and even detailed that cases of adolescents who falsify their identities to access online gambling games, even legal ones, were detected. The Buenos Aires official stated that according to sector data, only 20% of online gambling is carried out on authorized legal platforms while 80% is carried out illegally. “Therein lies our main problems because the regulations and controls that the State can carry out are much smaller,” he said.

Thus, Bianco explained that the government ordered the start of various measures and actions summarized in six axes of work:

1. OBSERVATORY As a first measure, the government announced that an “adolescent gambling observatory” will be created in order to have data to outline better public policies.

2. DISSEMINATION CAMPAIGNS The government that in the short term will begin to broadcast state advertising campaigns in the Province regarding prevention in addition to the organization of participatory forums and workshops.

3. NEW REGULATIONS AND LOCKDOWN IN SCHOOLS Among the measures to be implemented, Bianco announced that powerful companies in the sector that are licensed in the Province of Buenos Aires will be encouraged to place on their platforms the use of biometric data to prove identity as a condition for entry. This is intended, he said, for adolescents to use data from relatives or other adults. He also announced that new “self-control mechanisms” will be defined that the platforms must introduce with time limits, alert systems and a self-exclusion scheme with a common form that will go directly to the Ministry of Health so that attention can be given to the person who requires it. In turn, he pointed out that the IP addresses of legal platforms and all illegal ones that are detected and that, in parallel, are reported to Justice, will be blocked in all the Wi-Fi networks of Buenos Aires secondary schools.

4. PREVENTION PROGRAMS The Government Minister said at the press conference that there has been a compulsive gambling prevention program in the Province for 20 years to which “the issue of online gambling will now be added.” In turn, he stated that the ten centers for addressing gambling addiction that exist in the Buenos Aires territory will be valued, including Mar del Plata, which years ago was a focus of conflict due to an attempt to dismantle it.

5. REPORTING ILLEGAL PLATFORMS As part of the battery of measures, the government affirmed that they will strengthen the commission against illegal gambling and indicated that omnibus complaints have already been made against illegal platforms detected on the web and that from now on they will begin to work on specific complaints, specific for each particular site.

Law 15079 established that operating companies must pay a fee to the Province of no less than 2% of gross profits. This financing that the Buenos Aires State obtains through online gambling led Bianco, at this Monday's conference, to distinguish between legal and illegal gambling in the face of a journalistic question that linked them based on the effects on mental health.

The authorities of three Chilean teams activated football alarms. Club Deportivo Palestino, Club Deportes Iquique and O'Higgins FC published a letter denouncing an unknown link between the National Professional Football Association (ANFP) and a private company linked to online betting.

The clubs accused the ANFP of having paid contracts with Genius Sports, an international company based in England that manages sports data for betting houses.

Deportes Iquique detailed a situation that occurred during one of their matches in their minor series: they discovered that the match was being broadcast on the platform of an online betting house. Upon investigation, Iquique learned that during the incident there was a person from Genius Sports who transmitted all the information through his cell phone.

Both Palestino and O'Higgins later discovered that there were also people from the same company attending their training teams' matches. After an investigation, they managed to determine that there are contracts with the ANFP that allow that company's personnel to enter the stadiums.

"This company pays ANFP to have access to the competition data and provide detailed information on each event that occurred in the matches, for use by the betting houses, which we consider unpresentable," the complainant teams stated in the letter. In the letter, the teams spoke directly to Pablo Milad, president of the organization, and denounced that these links promote fixing and fraud in matches: "You and all of us who have a relationship with football know how dangerous the relationship with football is. sports betting system. Especially in the case of youth football that takes place in an environment that is more difficult to control, with players with less capacity to resist pressures and offers, with parents with easy access to people with an interest in fixing results and even with technical bodies with little experience”.

Although there is still no legal framework that regulates this situation in Chile, the clubs assured that the FIFA (International Association of Football Federation) regulations do. Citing an article from the international entity's Code of Ethics, they stated that "all types of interest with entities, companies, organizations that promote, negotiate or direct bets related to football matches" are prohibited.