With the arrival of international gambling sites in the country, it is expected that, in a short time, these companies will become the main investors in the shirts of Serie A teams of the ‘Brasileirão’. Currently, 11 of the 20 elite teams already have financial contributions from these companies. Another form of winning is guaranteed by law, which provides that 2% of the betting movement will go to clubs.
According to projections of lawyers specializing in the subject, at the request of O GLOBO, these two fronts represent more than R$ 300 million (US$ 75m) to football.
"The sponsorship potential is bigger than what Caixa Econômica Federal invested in football. I take as a base the value of sponsorships in the Premier League and make an extrapolation to the Brazilian market. My estimate is about R$ 224 million (US$ 56m)," says Luiz Felipe Maia, lawyer specializing in gaming regulation from the University of Las Vegas.
As a comparison, Caixa, which stopped supporting the sport this year, disbursed R$ 127.8 million (US$ 31.7m) in contributions to 25 clubs, Series A, B and C in 2018.
Largest sports betting market in the world, the UK moves US$ 3 billion a year in the sector. Among the 20 clubs in the Premier League, ten clubs have betting sites as their master shirt sponsor.
For Pedro Trengrouse, vice-president of the Special Commission on Sports, Lottery and Entertainment Law of the Federal Council of the Brazilian Bar Association, only the first division can win sponsorships larger than all that Caixa spent on football, in teams of the three main divisions of the country.
"If all Serie A clubs have a betting site as their master sponsor, which certainly can only happen with proper regulation, the amount that could be raised exceeds R$ 150 million (US$ 37m) a year," projects Trengrouse.
The lawyer points out that there are other fronts for clubs with the law that allows the exploitation of sports betting in Brazil.
"Importantly, the law provides for the allocation of 2% of the movement of betting to football clubs. This today would represent R$ 80 million (US$ 20m) per year," says Trengrouse.
For Maia, a correction to the law is needed, as it only provides for the remuneration of football clubs for the use of image on gambling sites.
"Today, only football is paid by law. That is, betting on NBB (New Basketball Brazil), for example, will generate revenue only for football. It is an adjustment that will need to be made in the law," explains Maia.
Regulation of the law
Three weeks ago, the Ministry of Economy, which will regulate the law, launched a public consultation on the subject. By the end of the month, gambling sites, sports entities and gamblers will be able to give suggestions on rules to be followed in the country.
The federal government will receive the proposals, study them and expect to release the regulation by November. Some important decisions will need to be made. One is about the system to be followed in the country: permission or concession.
In the first case, there is free development of companies in the country, simply following the rules established by law. In the second, the state is the one who will grant the concession to explore betting in the country. This concession would operate for 10 to 15 years and limit the number of companies able to operate.
"Permission seems to me to be the most appropriate model, mainly because of the dynamism of the market," says Trengrouse.
"I am completely opposed to limiting the number of companies, without having experience with the market in Brazil. We have no idea if the number of sites that want to operate is five, ten or 50. So you can’t cast," says Maia.
Another critical point in the legislation is how taxation will work. The lawyers argue that the tax should be levied on gross revenue minus premiums paid and not on total corporate revenue.
"The best regime is what maximizes state revenue with the full development of private enterprise. In online gambling, the challenge is to channel the illegal gambling movement to properly licensed operators. There are studies indicating that the 20% tax on Gross Gaming Revenue (GGR), gross revenue minus paid premiums, allows the regulated market to keep at least 90% of the illegal gambling movement," says Trengrouse.
The lawyer cites the Institute of Commerce and Economics of Dusseldorf (Germany), which has elected the United Kingdom as the best tax model for online gaming, with a 15% GGR tax controlling the and 95% of the market. There are also bad examples in the world.
"The Portuguese market is a good example of what not to do. Portugal has created such a bureaucratic and expensive license process that few companies go there. If you open the market with very high taxation, no one comes," comments Maia.
The Portuguese model established an 8% tax on gross revenues, removing the interest of companies to operate in the country.
"This has managed to channel to the regulated market only 38% of illegal gambling. And because illegal gambling pays no taxes, the consequence is that 62% remains uncontrolled or taxed," Trengrouse comments.
Source: GMB / Adalberto Leister Filho - O Globo
