Brazilian Football Clubs Issue Tax Ultimatum

April 25, 2023
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Some of Brazil’s biggest football clubs are threatening to pull their logos from sports-betting platforms if they do not receive a larger share of betting revenue once a regulatory regime is brought into full effect.

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Some of Brazil’s biggest football clubs are threatening to pull their logos from sports-betting platforms if they do not receive a larger share of betting revenue once a regulatory regime is brought into full effect.

In a letter sent on Friday (April 21) to finance minister Fernando Haddad, the clubs asked for 5.01 percent of gross gaming revenue (GGR), rather than the 1.63 percent they are currently set to receive.

If their demands are not met, clubs say they will veto the use of any content featuring their logos or brands on licensed gambling websites.

The sports-betting law originally passed in 2018, for which an implementation decree is finally expected to emerge in the coming weeks, detailed that football clubs would receive 1.63 percent of the 5 percent GGR tax.

Government officials have since indicated that tax will be set at 15 percent of GGR, but did not announce any matching uplift in the percentage awarded to football clubs.

Teams say they are looking to replace the significant amount of cash they currently receive from the grey market.

“The clubs currently earn a large part of their income through betting companies, either through direct sponsorship, or through licensing or assignment of use of brands,” according to the letter.

As well as demanding a larger cut of the increased tax take, clubs say they want to receive the money directly, without the Brazilian Football Confederation (CBF) or any similar entity acting as an intermediary.

They are also demanding that the Brazilian Football Confederation (CBF) only receive a share of the revenue for national team games.

Clubs also do not want the money split evenly. Instead, teams would receive money proportional to the volume of bets placed on their matches.

“Although we understand the need for regulation of economic activities, as a way to maintain the economic order and tax collection, it is necessary that this regulation preserve the economic viability of the activity and protect the rights of the clubs, under the risk of unbalancing a sensitive financial structure that may have negative and even deleterious effects to the activity,” the letter says.

The law is currently awaiting an emergency decree, or so-called provisional measure, from President Luiz Inácio Lula da Silva (known as Lula), which is expected any day.

The teams began openly lobbying the government for an increased say on the impending sports-betting regulations in early April, claiming they had been shut out of the process.

The CBF had also sought a higher portion of revenue for itself, lobbying earlier this month for up to 4 percent of betting turnover, but retreated when it became clear that its demands had no traction.

The eight clubs based in Rio de Janeiro and São Paulo that have signed the letter are Botafogo, Corinthians, Flamengo, Fluminense, Palmeiras, Santos, São Paulo and Vasco da Gama.

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