The latest to join was Vasco. Last Thursday (21), the ‘Cruz-Maltino’ club made PixBet official as its master sponsor. The company, which was already investing in Ponte Preta, América-MG and Goiás, will invest R$ 9 million (US$1.6m) by December 2022. The evolution of bookmakers at Brazilian clubs, however, still brings some dilemmas.
The sector still waits for clear regulation
On December 12, 2018, then President of the Republic Michel Temer sanctioned Law No. 13,756 (approved by the Senate in the previous month). In addition to allocating part of the funds raised from federal lotteries to public safety, the change provided for a regulation for sports betting in Brazil. According to the text, "the fixed-quota betting lottery will be authorized or granted by the Ministry of Finance" within a period of two years, extendable for another two years to make the activity viable.
The regulation was the kickoff for about 450 bookmakers to land in the country, moving R$ 12 billion (US$ 2.15b) per year (according to data from H2 Gambling, consultant of the activity). Many of these brands (Sportsbet.Io, Galera.Bet, Betano, among others) found a way to gain visibility in football.
There was another leap thanks to Law No. 14,183, enacted in July 2021 by the current President of the Republic, Jair Bolsonaro. There was a change in the taxation and distribution of the collection of these bets. Specialist partner in Tax Law at CSMV Advogados, Flávio Sanches sees the new legislation as "a promoter of the betting market."
“In short, the big change was the change in the calculation basis of taxes levied on the operation of the betting firms established in Brazil. Until the middle of this year, the entire volume of the bet was based on incidence. And with the change, prizes to be paid, the Income Tax on premiums (30% of the premium) and social security contributions paid on the total collection were excluded from this taxable base,” highlighted Sanches.
“This corrected a distortion in the eyes of those who operate the bet, as this does not consider the prize as its own revenue, but something that transits momentarily in a flow that comes from the bettors and back to them. It is the net value of the prize with the respective Income Tax taxation, in addition to the social security contribution, which becomes the taxable base of the bookmakers, adjusting the total tax burden by approximately 20%, which is the tax burden found in others countries,” added the expert.
Attorney Eduardo Carlezzo warns of the urgent need for clear legislation on the sector, in order to bring foreign exchange to Brazil: “The Brazilian market, as a matter of fact, is already explored, in a "gray" way, by the vast majority of operators . However, some large operators will only land with force when the market is 100% legal, and this will certainly bring an economic benefit to the clubs as we will have more large companies with greater investment potential in Brazilian football”.
'Meanders' for houses entering Brazil
The impasse in Brazilian legislation did not prevent bookmakers from entering Brazil. Some of them are based in other countries, where there is no risk of being exposed to the Criminal Misdemeanor Law (Law No. 3688, of 1941), which prohibits the exploitation and establishment of games of chance.
“We are already used to many bookmakers operating in the Brazilian market. The issue is that many compete here from foreign jurisdictions, due to local taxation,” said Flávio Sanches, specialist in Tax Law at CSMV Advogados. Sportingbet is based in London. Dafabet, for example, is located in the Philippines.
Football as 'flagship' for punters
The Brazilian's passion for football weighed on the investment of many bookmakers. Vice president of marketing and communication at Galera.bet, which has contracts with Corinthians, Sport and Cruzeiro, Ricardo Rosada detailed.
“When a company reaches an agreement for sponsorship, it is due to a two-way street. It is about the confidence that the exposure of your brand will happen in a strong way and, in addition, that audience has the potential to bring profits to your company. Football is the flagship in betting and contributes a lot to the movement of so many sports venues,” explains Rosada.
Rosada highlighted another aspect that makes investing in football attractive. “Not all fans like to bet, but the public that bets likes football, just as there are bettors in other sports like basketball and tennis,” he said.
The agreement with the clubs includes highlighting the brand on shirts and other properties, such as advertising boards in matches and even in commercial calls.
Ricardo Rosada, vice president of marketing and communication at Galera.bet, points out how clearer regulation on betting could change the sector. “Part of our operation takes place abroad, with a very high level of compliance. As soon as the law is enacted in Brazil, the market for bookmakers can increase here by up to five times,” he projects.
'Boom' is seen with enthusiasm in football
The new route was well received by Brazilian clubs. Marketing vice president at Internacional, the club that signed a contract with Betsul, Jorge Avancini sees that the activity is an alternative that has been gaining ground.
“I see the arrival of these new players with great importance. They came to take over the departure of other sponsors and came to stay. Inter made an agreement with Betsul and I believe in a two-way partnership, as the clubs also earn percentages on these bets, in addition to activations with the fans,” he said.
In the eyes of the leader of Internacional, this beginning of partnership shows the potential of bookmakers for the economy. “It is an innovative market, which generates favorable opportunities and moves the economy. All of this, of course, as long as it is fully legal and transparent, and therefore regulation in the short term will be a fundamental step for this sector,” he declared.
Options for 'fan-bettors'!
The diversity of the football branch was more explicit in Juventude. Marsbet, which printed the shorts of the team from Caxias do Sul since August, now has the company of PixBet that will be on the front bar under the game shirts. The agreement also allows visibility in the backdrop of interviews, social media cards, website and CT boards.
Fábio Pizzamiglio, administration and marketing vice presidente of Juventude, naturally sees the presence of the two bookmakers in the club's uniform. “There was no problem with the agreement. Marsbet is a Turkish company, focused on the international market, while PixBet is focused on the domestic market,” he said.
Pizzamiglio is keen for the law on gaming to go into effect. “We understand this to be positive, since we could also have an increase in revenues destined to the clubs, in addition to the nationalization of dividends from betting,” he added.
Market look extends to Series B
After the "allotment" of spaces in Serie A clubs' uniforms (only Cuiabá does not have a sponsor in this sector), bookmakers turned to Serie B. Currently, there are 14 clubs that print online gaming brands.
Business director of Botafogo, which closed with Estrela.Bet, Lenin Franco says that this series of sponsorships is not surprising. “In addition to being the market that has invested the most in football for obvious reasons, this Series B is historic, as it has a large number of Brazilian champions in the dispute. In other words, it increases the audience and the level of the Second Division,” he commented.
Franco brings a counterpoint to the current lack of regulation around the betting market. ”The lack of regulation actually provides a greater number of companies in the market, it does not create obstacles. But, from the moment it is regulated, the number of companies will decrease, as not all will be able to become regularized," and clarified: "Today, what we have is a dispute for market reserve, that is, to guarantee the spaces of the shirts to prevent the competitor from occupying.”
A 2022 full of expectations
The law enacted by former president Michel Temer indicated a period of two years, extendable for another two until a clear regulation of the activity was established and who would be responsible for granting and authorizing lotteries and bets (physical or virtual). With this, the year 2022 becomes decisive for the activity.
Lawyer Eduardo Carlezzo warns of the urgency to define the activities of bookmakers. “The federal government is passing up a great opportunity to have a betting regulation system in place that will finally allow for the legalization of operations in the country and, with this, enjoy all the benefits that legitimate businesses can bring. The delay in presenting the final regulation is incomprehensible.”
“There are dozens of countries that currently have regulated the subject for a long time and, therefore, have already tested the feasibility of the rules in practice. That's why we don't need to invent anything, but just copy the best experiences,” Carlezzo added.
Specialist in Tax Law, Flávio Sanches already sees at least a good omen for the field to start to establish itself. "With this taxation consistent with that of countries that usually attract bookmakers, and considering that the Brazilian market is naturally considered by them, it is concluded that more bookmakers make the move to effectively establish themselves in the country, generating jobs, income and revenue that could previously be moved abroad,” he said.
Sanches makes a reservation shortly thereafter. “It is evident that the tax burden is not the only decision-making element for opening a company in the country, but it is certainly one of the fundamental points. At least in terms of the tax burden, we have been more competitive since the middle of this July,” he concluded.
Source: Vinícius Faustini - Parceria Lance & IstoÉ
