Flamengo will receive R$10 million (US$1.8m) in 2024, with the following installments distributed between 2025 and 2027. However, the question arises about the legality of this initiative, considering the legislation in force in Brazil for the betting sector.
Law No. 14,790/2023, which regulates fixed-odds betting, establishes that only legal entities previously authorized by the Prizes and Betting Department of the Ministry of Finance may engage in this type of activity.
As explained by Felipe Crisafulli, partner at Ambiel Advogados and specialist in Sports Law and Responsible Gaming, Flamengo, as an association, is unable to own Flabet, that is, to act as a betting operator.
"The Prizes and Betting Secretariat of the Ministry of Finance, through Ordinance SPA/MF No. 827, of May 21, 2024, restricted the granting of authorization for the commercial exploitation of the fixed-odds lottery betting modality to limited liability companies or corporations," highlights Crisafulli.
"This seems to justify the Flamengo Board Members, according to reports, having merely approved the licensing of the use of its name and brand to Pixbet, a company that operates in the betting market and is the club's master sponsor. Pixbet would act as an operating agent at Flabet. Thus, in principle, the parties would ensure that the structure is in accordance with the legislation and regulations on the matter," he explains.
The partnership between Flamengo and Pixbet may have significant impacts on the sports betting market in Brazil. Crisafulli notes that by associating its name and brand with one of the most popular clubs in the country, Pixbet strengthens its presence in the market and expands its reach among fans of the red-and-black team from Rio de Janeiro.
"Consumers respond well and are attracted by the economic advantages they see. Given that bettors are nothing more than consumers, if the conditions offered are competitive, even with club rivalries, the economic factor tends to prevail when deciding which platform to bet on," the lawyer ponders.
However, the creation of a betting site linked to a football club raises questions about sports integrity, especially in a scenario where match-fixing scandals have been a growing concern. The expert explains that Flamengo, by licensing its name and brand, will not be directly involved in the operation of the site, which minimizes the risk of conflict of interest.
"Brazilian legislation and sports regulations already provide mechanisms to prevent manipulation and protect the integrity of competitions, and the responsibility for maintaining these ethical practices will fall to Pixbet, as the betting operator, and not to the club," he states.
While the creation of Flabet follows the established legal standards, its effectiveness and acceptance in the market will depend on the receptiveness of bettors and Pixbet's ability to offer a competitive product. This partnership could mark the beginning of a new trend in the sports betting market in Brazil, but, in Crisafulli's view, "only time will tell if this business model will be widely adopted."
Felipe Crisafulli
Partner at Ambiel Advogados and specialist in Sports Law and Responsible Gaming.
Member of the Gaming, Betting and Responsible Gaming Commission of the OAB/SP.
