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Major football clubs showed up at Brazil's Chamber of Deputies last week to lobby for a share of profits or data rights from sports betting, whenever it is finally regulated.
The Chamber of Deputies is currently debating updating the Pelé Law — named for the footballing great — which regulates most aspects of sports in Brazil.
First passed nearly 25 years ago in March 1998, the Pelé Law's broad remit includes player contracts and now, could also include gambling.
Neither casino-style gambling nor sports betting, which are connected to two different pieces of legislation, are regulated in Brazil yet, despite hopes that at least sports betting would be ready for the FIFA World Cup, after fixed-odds betting was legalised through a federal law passed in December 2018 that has yet to be implemented.
Those hopes of a pre-World Cup launch of a regulated sports-betting market were all but dashed last week when legislators announced that they had other priorities to focus on in the run up to the general election in October, ahead of approving technical amendments that are expected to accompany a regulatory decree.
The 15 clubs assembled in Brasilia last week reportedly want to include a paragraph in the update to the law which would grant them economic rights to profits made from gambling.
“As a regulatory framework for betting is created, we are trying to find new money to promote the sport. It is an important source of income. We need to fight to have our fair share,” said one.
The clubs have reportedly zeroed in on Article 42 of the Pelé Law for amendment, which reads in part that sports entities have “arena rights consist[ing] of the exclusive prerogative to negotiate, authorize or prohibit the capture, fixation, emission, transmission, retransmission or reproduction of images of the sports event, by any means or process”.
Sports-betting operators typically use such images and the clubs argue that they would be economically exploiting intellectual property that is the right of clubs and competition organisers.
Luiz Felipe Maia, an expert on gambling at law firm Maia Yoshiyasu in Sao Paulo, told VIXIO GamblingCompliance of the Pelé Law lobby: “The issue with regulation lies with Congress because of the evangelical influence, and now they want to change the law before it even starts to be enforced; [it] doesn't make much sense.”
A further point of confusion is the fact that Brazil's 2018 sports-betting law, as amended last summer, would already entitle sporting bodies 1.63 percent of gross revenue as part of an overall effective tax of around 20 percent.
Maia elaborated: “I think it's definitely not the right timing, and my main concern is that they are discussing revenue share without understanding the economics of the basis. They are not taking into account any international benchmark and that may impact the opening of the market at the end of the day. They are so eager to get the revenue that they might kill the golden goose before it's born.”
Pressure to update the Pelé Law is not limited to gambling. Other areas of focus for lawmakers include creating a special pension for Olympic and Paralympic athletes and getting rid of the ceiling on image rights for football players.
