Brazil Begins Probe Into Sports-Betting Sponsorships

August 31, 2022
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Brazil’s Ministry of Justice is seeking information from more than 50 football teams and leagues over their marketing partnerships with offshore betting companies that remain unregulated in the country.

Brazil’s Ministry of Justice is seeking information from more than 50 football teams and leagues over their marketing partnerships with offshore betting companies that remain unregulated in the country.

The ministry announced the investigation on Tuesday (August 30) on behalf of Brazil’s national consumer protection secretary (Senacon), with some 54 entities granted a period of ten days to provide copies of their advertising and sponsorship contracts with sports-betting companies or face potential administrative proceedings.

Betting sponsorships and advertising have boomed in Brazil since a December 2018 federal law recognised fixed-odds betting as a lawful form of lottery game.

However, the justice ministry noted in its statement that regulations to implement the law have yet to be adopted.

“As such, Senacon understands that the activity may be being operated without the due authorisation and without any mechanisms for control, regulation or accountability,” the ministry said.

The justice ministry said Senacon was seeking the information to “investigate which companies are executing the contracts with the clubs, given that the majority are based outside of Brazil.”

The December 2018 law has led to a legal argument that football clubs, sports federations and media groups are no longer prevented from partnering with betting companies, as Brazilian advertising laws require advertisers to abide by industry codes that prohibit the marketing of illegal activities and fixed-odds betting no longer fits into that category.

Almost all Brazil’s top-flight football teams now have a betting sponsor, with the likes of Betano, Dafabet and Betfair among the more visible brands in the Brazilian market.

The justice ministry said it sent the information requests to all 40 teams in the top two divisions of the Brasileirão football league, 13 regional football competitions, as well as the Rede Globo media conglomerate.

At a minimum, the probe into betting advertising would appear to underscore the status of legal limbo in which sports betting remains in Brazil.

The federal government is now set to miss the 2022 FIFA World Cup as an obvious launch date for a regulated market, with a decree to implement the 2018 law not expected to be signed until after presidential elections due to take place in October.

It is not clear how exactly that forthcoming decree will address the issue of marketing and advertising by offshore operators in advance of a licensing system being established.

However, the lower house of Brazil’s Congress last month voted to approve a new national sports law that would ban any advertising by offshore betting companies, potentially curtailing all marketing until they can become licensed.

The bill, PL 1153/2019, still must be passed again by the Senate, which did not include the betting provisions in its original version of the legislation.

Senate President Rodrigo Pacheco pledged last week that the updates to Brazil’s so-called Pele Law on sport would be voted on in the Senate after the elections.

Pacheco also suggested that Romário, the legendary Brazilian footballer turned federal senator from Rio de Janeiro state, would play a central role in steering the new national sports law through Congress' upper chamber.

         

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