On August 13, Flamengo's Deliberative Council approved the creation of Flabet, a fixed-odds betting platform that exploits the prestige of the club's intellectual properties. Under the management of Pixbet, Flamengo's master sponsor and a betting operator licensed by the Rio de Janeiro State Lottery (Loterj), Flabet is positioning itself as an innovation in the betting market.
However, this decision immediately raised doubts about its legal compliance, especially in light of the provisions of Law 14,790 of 2023, the Fixed-Odds Betting Law, and the regulations issued by the Prizes and Betting Secretariat (SPA) of the Ministry of Finance.
In light of Ordinance SPA/MF 827 of 2024, it is clear that the granting of authorization to operate fixed-odds betting is restricted exclusively to legal entities constituted as a limited liability company or corporation. Therefore, since Flamengo is a civil association, the current legislation legally disqualifies it from requesting the necessary authorization to directly operate Flabet.
Furthermore, the Betting Law establishes that the partner or controlling shareholder of a betting operator, whether individually or as part of a control agreement, cannot hold a direct or indirect stake in a professional sports organization. This restriction, designed to avoid conflicts of interest and preserve sports integrity, combined with the requirement of corporate form, prevents Flamengo from being the operator of Flabet within the federal regulatory perimeter.
At the state level, the scenario presents different nuances. The Loterj guidelines do not establish an explicit disqualification that prevents civil associations, such as Flamengo, from participating in the accreditation process. However, the conditions for participation stipulate that only legal entities operating in a field of activity compatible with the contracted purpose are eligible, which could, in theory, exclude the club from this procedure.
Given these limitations, the question arises as to how Flamengo structured Flabet's business model to avoid violating the provisions presented here. According to information published in the media, the club adopted a brand licensing model to make the operation viable.
This agreement guarantees Flamengo a minimum revenue of R$82.5 million (US$ 14.9m), distributed as follows:
R$10 million (US$ 1.8m) – in 2024
R$22.5 million (US$ 4.1m) – in 2025
R$25 million (US$ 4.5m) – in 2026
R$25 million (US$ 4.5m) – in 2027
In addition to this amount, the club may receive a royalty fee of 1% of the gross betting revenue (GGR) if this percentage exceeds the minimum guaranteed amount, also characterizing it as a performance-based compensation.
Therefore, the format of this partnership appears to ensure compliance with the Betting Law, while allowing Flamengo to expand its revenue sources by strategically monetizing the value of its brand, generating additional income. At the same time, Pixbet can expand its market presence, leveraging the club’s immense popularity to grow its consumer base and capture incremental value throughout the lifecycle of the partnership.
In conclusion, the model adopted by Flamengo with Flabet represents an innovative solution to the challenge of reconciling commercial opportunities with the restrictions imposed by current legislation.
This strategic approach raises a crucial question: will other football clubs follow suit, adopting similar models to capitalize on their brand power in the growing betting market? The replication of this strategy by other sports entities may signal an emerging trend in which the ability to identify and exploit regulatory gaps becomes essential to maximize revenue-generating opportunities in the sector.
Udo Seckelmann
Lawyer and head of the Betting and Crypto department at Bichara e Motta Advogados, professor at CBF Academy and master in international sports law from the Instituto Superior de Derecho y Economía, in Madrid (Spain).
Pedro Heitor de Araújo
Law student at PUC-RJ and has worked in the crypto & gambling areas at Bichara e Motta Advogados since 2022. As an analyst, researcher and enthusiast, he is dedicated to the legal dynamics related to the regulation of crypto assets, DeFi (decentralized finance), betting and gaming. He took courses in DeFi and non-fungible tokens (NFTs) at the University of Nicosia (Cyprus). In addition, he founded the legal community "pedroheitor.eth", promoting debates and disseminating information on Cryptolaw and Gambling Law.
