State-owned bank Caixa Economica Federal has been a great partner of Brazilian football. About US$ 154 million were invested in sponsorship in the last seven years, more than US$ 32 million last year alone. Government signaling that Caixa should drastically reduce value has raised concern in the sector.
What will happen with Caixa's sponsorships is still uncertain, but there is a light at the end of the tunnel: in December 2018, Law 13,756 was approved, which created fixed odd betting on sports events and should be regulated in the next 4 years.
Once the regulatory process is finalized, sports betting licenses may be granted and several international companies are expected to come to the country. We are talking about a market that generates billion of dollar receipts around the world, with publicly traded companies that are today the biggest sponsors of the international football market.
The potential of sponsorship for Brazilian football with the start of sports betting operations in the country is immense. International analyst estimates point to more than US$ 1.4 billion in revenue, which is conservative when compared to the English market, which only with bets raised in the UK reaches almost US$ 2.3 billion.
There, about 60% of the clubs in the first two divisions are sponsored by betting companies. The nine Premier League sponsored teams received in the 2017-2018 season more than US$ 51 million. Another seven teams that have advertising partnerships without sponsorship in shirt, about US$ 11.5 million. In the Second Division of the English Championship the total value of sponsorship only of betting companies was US$ 10.6 million, higher than the sponsorship of Series B of the Brazilian Championship. These figures are more than double what Caixa sponsored last year for all divisions of Brazilian football.
It is reasonable, therefore, to conclude that there is a check of about US$ 44 million in sponsorship and marketing partnerships ready to be delivered to Brazilian football sector. Of course, the size of the check will depend on how the activity will be regulated. Primarily there will be free competition as well as sponsorship of sports entities.
To compensate the check, with the law already approved, it is enough that the government completes the regulation. The government can eliminate with one hand the sponsorship from Caixa, paid by the taxpayer, and give with the other one the sponsorship of sports betting companies, of greater value and paid by individuals.
Luiz Felipe Maia
Professor and Certified Lawyer in casino and betting regulation at the University of Nevada, Las Vegas
Source: GMB / Mundodo Marketing (Brasil)
