Faced with the regulation of sports betting in Brazil, many topics have been discussed, with the manifestation of football clubs having recently gained strength, indicating their desire to increase the share of the collection destined to Brazilian sports entities that choose to assign to operators the rights of use of their denominations, brands, emblems, anthems, symbols and the like.
In practical terms, according to the original wording of article 30, para. 1, III, of Law 13.756/2018, as it is in the interest of sports entities to license their symbols, sports betting houses regulated by the Government of Brazil must pay 1.63% on the result of the collection, less the value of the prizes paid. The football clubs understand that this percentage is low, and claim its increase, under the risk of vetoing operators not only the right to use symbols, but also their names.
Before delving into the technical issues that permeate the discussion, it is a basic premise to understand how betting sites work in Brazil and around the world. Except when there is a specific negotiation between the operator and a sporting entity, the websites do not use any symbols or images of those entities. The entire operation is structured solely based on the name of the club and the player. Just it.
Sports entities, especially football clubs, have threatened the Government to veto the use by bookmakers not only of the symbols (which as a rule are not exploited), but even of the names, supported by article 87 of the Law 9.615/1998 – the Pelé Law – which provides that “the name and symbols of the sports administration entity or sports practice, as well as the sports name or nickname of the professional athlete, are the exclusive property of the same, counting on the legal protection , valid for the entire national territory, for an indefinite period, without the need for registration or annotation with the competent body.“
This discussion is not simple and does not boil down to the aforementioned legal provision. Ordinary law evokes a guarantee for clubs and athletes, that is undeniable. But in Law, every norm, to be correctly applied, must be analyzed within a context. The context to consider here is as follows. Can a betting platform operate without using the official symbols of clubs and sports competitions? The answer is yes. Yes, the bets will remain viable, even if the consumer experience is partially impaired. That is, the prerogative of clubs and athletes to exercise their right does not harm third parties, it only limits their autonomy.
On the other hand, if sports entities and athletes prevent the use of their name by bookmakers, is it still possible to maintain the operation of the entertainment services provided by the operators? The answer is negative. Without the possibility of mentioning the name of a club or athlete, the bookmaker's service is not provided.
It's simple to understand why. Without the names, the consumer cannot browse the platform and bet on a real sporting event. Let's imagine a match between Cruzeiro and Grêmio. How will the bettor select the hypothetical victory of the club from Rio Grande do Sul over the club from Minas Gerais if the operator cannot announce the match? Or indicate that Cruzeiro will win 5 corners in their favor throughout the match, if it is not possible to name the team? The same works for athletes, how to point out that a certain player will receive a yellow card in the match, if it is not allowed to indicate his name on the platform? The impossibility of mentioning the names of sports entities and athletes makes navigating the site and guiding bettors within it impossible, and consequently prevents the development of sports betting. The prerogative of clubs and athletes to exercise their right goes beyond restricting the right of third parties, it simply prevents the achievement of the right to work and free enterprise.
As Fernando Vasconcelos rightly pondered, sports betting houses do not use the names of clubs or athletes to confuse the consumer or even to convey an image that they are official products of the club or partner of the athletes:
“In this relationship, there is a notorious public consumer interest in having basic information about clubs and athletes, from what are the matches in that round to which are the athletes who have an expectation of acting in that match.
See, therefore, that, unlike the undue commercial exploitation of the properties of clubs and athletes in the sale of unlicensed / pirated products, sports betting platforms, and even other platforms, such as Fantasy Sports, do not use the name or symbol of clubs and athletes for directly commercial purposes, but only as an informative link necessary to offer their products to consumers.“
For this very basic reason, the use of names by bookmakers is allowed worldwide, it is understood that the reference has an informative purpose for the bettor. In Brazil, however, football clubs base themselves on article 87 of the Pelé Law to try to prohibit the use of names, without observing that, by prohibiting the exploitation of such right, they are preventing the performance of a business activity.
This clash, in legal terms, is not restricted to the provisions of article 87 of Law 9,615/1998, it refers to principled issues, of a substantially greater scope. We are facing a conflict of fundamental rights. On the one hand, the right of sports entities and athletes based on article 5.º, X and V of the Federal Constitution, which deals with very personal rights, such as voice, image, name, and the reproduction of skills and characteristics that identify the person. Rights that, according to article 60, paragraph 4, IV, of the constitutional text were elevated to the condition of stony clauses, that is, themes of such relevance to the nation that they cannot be modified, even by a constitutional amendment.
On the opposite side are the bookmakers, who defend the right to use names as a way to make their activity viable, that is, as a way to preserve jobs and ensure compliance with free enterprise. The social values of work and free initiative were inserted in the constitutional text in Articles 1 and 170, as fundamental principles of the Republic and the economic order. Article 5.º, XIII, of the Federal Constitution also reinforces that “the exercise of any work, trade or profession is free.”
As Minister Roberto Barroso well explained, “free enterprise does not only have an economic dimension, it has a dimension of individual freedom, of exercising personality rights. It transcends, therefore, the purely economic domain, to signify people's existential choices, whether on the professional level, whether on the personal level, or on the philanthropic level.” Due to its individual guarantee bias, it is an ironclad clause, safeguarded by article 60, § 4, IV, of the constitutional text.
In short, the attempt by clubs to restrict the use of their denominations by bookmakers creates a clash between two fundamental principles elevated to the status of stony clauses: right of personality (clubs) vs. right to work and free initiative (betting companies).
In the Brazilian Federal Constitution there is no express clause like the one contained in the constitutions of Germany (art. 19, III, of the Fundamental Law) and of Portugal (art. 18, III, of the Portuguese Constitution), providing for limits on restrictions on fundamental rights. Despite this, the STF has recognized the application of the idea of a limit in cases of collision between fundamental rights.
In HC 82,424, Minister Gilmar Mendes chose as a criterion for resolving conflicts between fundamental principles the application of the “principle of proportionality, also called the principle of due process of law in the substantive sense, or even the principle of prohibition of excess” as it constitutes “a requirement positive and material related to the content of restrictive acts of fundamental rights, in order to establish a limit of the limit or a prohibition of excess in the restriction of such rights.“
It is the application of the maxim of proportionality, in the expression of Robert Alexy, according to which the principle of proportionality determines the ultimate limit of the possibility of legitimate restriction of a certain fundamental right. That is, the limitation of a fundamental right must respect an essential core of that right. As Bernardo Gonçalves Fernandes points out, “any limitation (restriction) to fundamental rights must respect their essential core, that is, the essential core that directly involves fundamental rights and by derivation the notion of human dignity, which cannot be shaken.”
From the lessons drawn from the Supreme Court judgments and from the doctrine, it is observed that restrictions imposed by clubs – by prohibiting the use of their right to name – of the fundamental guarantees to work and free enterprise, inherent to human dignity, cannot be allowed , to the point of making them completely unfeasible. The right to work and free initiative are pillars of the Democratic State of Law. Thus, even if a possible restriction on the exercise of this right is admitted, the limitation cannot simply make it unfeasible, removing a minimum core of meaning from it.
The club guarantee cannot affect the essential core of the right to work and free enterprise, depriving economic agents of the right to work, undertake, innovate or compete. And, therefore, the disproportionate restriction intended by Brazilian clubs is contrary to the Federal Constitution.
More than that, it is the understanding of the STF that in the composition between principles and fundamental rules, the interest of the community, primary public interest, must be preserved, even to the detriment of the private interest. The right to work and free initiative are expressions of this prerogative.
Sports betting, legalized under the name of fixed quota lotteries, under the terms of article 29 of Law 13,756/2018, are public services. In his votes on ADPF 492 and 493, Minister Gilmar Mendes, resorting to Roberto Barroso's lessons, concluded that “it seems to us that, on the whole, the statement by Minister Luís Roberto Barroso, in a doctrinal article, confirms that 'in what refers to the legal nature of the lottery activity, legem habemus'. According to His Excellency: 'It is possible to state, thus, in line with the prevailing doctrinal position, that in Brazil the activity of operating lotteries has been qualified since a long time, and until the present, as a public service' (BARROSO, Luís Roberto. op. Cit., p. 264)."
That is, both the national legislation and the Supreme Court recognize the condition of services related to sports betting, as public services, that is, of interest to the community. Faced with the clash between the private interests of the clubs and the public interests of the operators, the solution to the conflict is categorically given by Minister Carmem Lúcia in MS 38180 AgR, when she states that "there are no private interests that can be opposed to reasons of relevant public interest."
From all of the above, if bookmakers choose to exploit the sports entity's symbols as provided for in Law 13.756/2018, they must remunerate such entities for the use of that right. The same happens if they choose to use the athlete's physiognomy, due to the provisions of article 87 of the Pelé Law. However, the simple use by the operators of the names of clubs and athletes in order to allow the navigation of bettors through the website or application, assumes an informative function and cannot be restricted, even under the argument that there is a fundamental right, because in the face of a clash of stony clauses, the public interest prevails over the private, in addition to the principle of proportionality requires that the application of a right does not make the essential core of the other unfeasible.
It is worth ending here by parodying the words of Minister Roberto Barroso in the RE 1,054,110 and ADPF 449 judgments. The best way to deal with innovations and creative disruption of the old order is not to impede progress, but rather to try to produce the possible conciliatory paths. Otherwise, it would be “like trying to stop the wind with your hands.”
Rafael Marchetti Marcondes
Professor of Sports, Entertainment and Tax Law. Doctor and Master in Tax Law from PUC/SP. MBA in sports management by ISDE in Barcelona/ES. MBA in sports betting management from the University of Ohio/USA. Chief Legal Officer at Rei do Pitaco. President of the Brazilian Association of Fantasy Sport (ABFS). Legal director of the Brazilian Institute for Responsible Gaming (IBJR). Director of Government Relations of the Brazilian Association for the Defense of the Integrity of Sport (ABRADIE).
Source: Lei em Campo
