Brazilian clubs ask for 5% of gross revenue from sports betting, threaten to veto image use

The entities said they were willing to dialogue with the Executive, but that in the absence of an agreement between the parties, they could present an objection to the project and veto the use of their image and brand by the websites. According to the letter, without the teams, bettors would lose interest and all parties would lose out.

The letter was sent to Minister Fernando Haddad (Finance). Poder360 had access to the document and found that it was signed by 8 teams: Botafogo, Corinthians, Flamengo, Fluminense, Palmeiras, Santos, São Paulo and Vasco da Gama.

Here are what the clubs propose:

• remuneration of 5.01% on the gross revenue of bookmakers;
• direct payment to the clubs, without the intermediation of the CBF or other entities;
• amount distributed proportionally to the volume of bets on each team's matches;
• CBF would receive only for matches played by Brazilian national teams, not for organized tournaments.

“Even if the need for regulation of economic activities is understood, as a way of maintaining the economic order and tax collection, it is necessary that this regulation preserves the economic viability of the activity and safeguards the right of the Clubs, under the risk of unbalancing a sensitive financial structure that may have negative and even deleterious effects on the activity,” declare the clubs in Rio and São Paulo.

The activity of sports betting was legalized by Law 13,756 of 2018, enacted in December of that year. It established a period of 4 years for the activity to be regularized. The deadline came to na end in December 2022.

The 2018 legislation established a 5% tax on GGR (Gross Gaming Revenue), with the revenue generated excluding ordinary taxes and prizes paid to gamblers. Of these 5%, about 1/3 (1.63%) would be allocated to clubs.

The federal government's proposal is to charge R$ 30 million for a 5-year license, in addition to the 15% tax on the GGR. The remuneration to the clubs would continue at 1.63%. Teams do not accept. They ask that the rate also be tripled, to around 5%.

In calculations made based on the figures released by the Treasury, this increase would increase the remuneration from R$ 29.34 million to R$ 88.02 million, which would be shared among “all clubs”. The signatory teams said, however, that today they receive more than that amount for exploiting their image.

“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,” states the letter.

Source: Poder360