The changes in consumer habits in modern society happen faster and faster, especially in relation to the entertainment industry. Radio has taken 38 years since its invention to reach 50 million people around the globe. The TV took thirteen. The internet, four. Google, only 100 days. Today, 1 billion people interact daily through Facebook. In 2010, less than 2 billion were connected to the internet. There are now 4 billion users. The UN predicts that by 2025 all the inhabitants of the planet will be online.
In recent years, this movement has caused the migration of advertisers from traditional media to the digital environment. In 2017, in the United States, US$ 205 billion went to digital platforms, compared to US$ 192 billion to TV. This reality is no different in Brazil. There are 67 million households with a television set, and about 17 million of them are connected to some kind of channel operator. It's a new avenue that opens. Today, in Brazil, 30 million households are plugged into broadband internet and there are over 230 million smartphones in operation (the latter, moreover, increasingly the main ways of engagement and audience).
The truth is that the business model of the high-income sport in the country has even been supported, for the most part, by the public power, and not by the private initiative, despite the fact that the Federal Constitution determines that the State should allocate public resources as a matter of priority to the sport in the first years of teaching, as a form of social promotion. Since 2001 about 10 billion reais (US$ 26bn) from the lotteries have been for the Ministry of Sports, the Brazilian Olympic Committee, football clubs, the Brazilian Paralympic Committee, the Brazilian Club Committee and the National Federation of Clubs. For the construction of the stadiums for 2014 World Cup, 8.3 billion reais (US$ 2.13bn) were invested. To raise the necessary structures to host the 2016 Olympic Games, another 7.2 billion (US$ 1.85bn). Corrected by inflation, in the last decade the sum of the resources destined to the sport sector, with medals and victories, exceeds 100 billion reais (US$ 258bn). But it is a scenario that must change now.
Allied to the migration of advertising investment from TV to the Internet, which modifies the dynamics of the purchase of rights to broadcast sports competitions, there are other challenges that are even more significant for Brazilian sports. There was a revision of the priorities of the government with the incorporation of the Ministry of Sports to the portfolio of Citizenship. The old sponsorship policy of state-owned enterprises has been left behind. Instead, priority should be given to public investment in educational sport. That is, the Brazilian sports industry needs, once and for all, to find alternative sources of resources.
Another change on the horizon is the privatization of lotteries, which will only have relevant market value with the decrease in the number of beneficiaries to increase the payout, jargon that identifies the portion of the revenue collected for the prizes. Real-time online sports betting has changed the fan experience and, over the last twenty years, has become a truly global market. This allows a Brazilian to place bets on sites registered abroad on the results of competitions in a third country. All this live. A study by the International Center for Sports Safety and Sorbonne University reveals that there are more than 8,000 sports betting sites in the world, 80% of them located in low tax territories such as Gibraltar, Malta, the Philippines, Costa Rica etc.
"There are 8,000 sports betting sites in the world, moving 3 trillion dollars every year"
Gambling-related numbers during the 2018 World Cup period in Russia impress. If Fifa's revenues - adding up TV rights, sponsorship, licensing, box office etc. - were 6 billion euros, it is estimated the global volume of online betting related to the World Cup at 136 billion euros. This happened even in a deregulated scenario. Until last year, among the ten largest economies in the world, the United States, China, Japan, and Brazil did not have specific laws for online betting - in the US alone, illegal betting accounts for about US$ 200 billion per year.
After the World Cup, however, gaming sector seems to have turned. The recent US Supreme Court decision that allows sports betting in all states and new Brazilian legislation sanctioned by the Temer government in late 2018 should boost the global market to values higher than the current estimate of 3 trillion dollars a year. Only in Brazil, with no regulations and restrictions on the advertising of betting sites, the annual movement surpasses 4 billion reais (US$ 1.05bn) in about 500 sites that offer bets in national competitions. Even so, in the current Brazilian Championship it is already possible to see advertising signs from at least a dozen sports betting sites, all based outside the country.
With due regulation, sports betting can be a source of many revenue for the sport, not only through sponsorship, as is already the case in England, but also through compensation for the risks of manipulation of results and commercial use of sports content. The United Nations Educational, Scientific and Cultural Organization (Unesco), which played a crucial role in the fight against doping and the creation of the World Anti-Doping Agency (WADA), and the Global Alliance for the Integrity of Sport encouraging governments and entities to regulate sports betting to prevent and combat illegal gambling, eradicating fraud and addiction. The police investigation launched in Spain on Tuesday 28, which arrested football players and officials suspected of negotiating the sale of results, came from the complaint of the league itself, the private entity that manages the local championship.
An example of what has been done to combat doping is the need for a global platform of cooperation between governments, operators and sports organizations for regulation and betting monitoring that can provide real-time intelligence alerts to authorities, regulators, betting operators and all parties involved in combating gambling, money laundering, illicit practices and organized crime, ensuring the sharing of information and providing reliable, accurate and independent data for disciplinary procedures and evidence for criminal proceedings.
In the United States, the NBA leads the move with major leagues to seek compensation from sports betting operators: 1% of the total bets on their games. It also asks for the right to restrict betting on own games as certain types are more susceptible to manipulation than others, such as betting on which player will make the first foul of the match. In this way, different sports would have different types of bets and each league would need to approve the modalities offered.
Brazil has the opportunity to be a global reference with a smart approach to sports betting, allowing its full development, guaranteeing bettors security, protecting vulnerable people with responsible gambling policies, preserving the integrity of the sport and recognizing that sports organizations provide the content for sports betting and deserve to be compensated for its use and the risks inherent in the potential for manipulation of results.
* Pedro Trengrouse is a lawyer, academic coordinator of the FGV / Fifa / Cies course in sports management and visiting professor at Harvard University. Flavio Zveiter is also lawyer, a member of the FIFA Independent Ethics Committee and a Master's degree from New York University (NYU)
Source: VEJA (published on issue nº 2637)
