Government may ban online betting; betting companies notify football clubs of possible contract termination

Some betting companies have begun sending formal legal notices to the clubs they sponsor. The documents warn of potential contract termination should the federal government issue a Provisional Measure (MP) against online gaming and sports betting. The government is preparing a provisional measure that could ban all forms of betting or impose restrictions on the sector. Meanwhile, President Luiz Inácio Lula da Silva has stepped up his criticism of betting companies and has begun advocating for an end to this market Superbet and Esportes da Sorte announce their sponsored partners. Superbet, which sponsors São Paulo and Fluminense, has notified the clubs of a potential contract termination. Picture: Marina Garcia / Fluminense FC So far, the two clubs have not announced whether they have officially received the document from the sponsor. Esportes da Sorte also sent a notification to its partner teams. Among them is Corinthians, which confirmed receipt of the communication. The club views the notice as a procedural step, and in the board’s assessment, the agreement could not continue if a ban on betting companies were to be imposed. Nevertheless, Corinthians and the sponsor maintain constant contact and a good relationship. Betano talks to Flamengo about possible changes. Betano, holder of the largest contract between a club and a betting company, has not yet officially notified Flamengo. Nevertheless, company representatives have spoken with the club’s board regarding a possible termination. According to a report by the UOL portal, the contract outlines different consequences for changes in legislation. A tax increase could alter the agreed-upon amounts, whereas the suspension of online games—such as casinos—would have a different impact. A general ban on betting, in turn, would lead to the termination of the partnership between the company and the club. In the market, betting companies consider it likely that contracts will be terminated if the Provisional Measure is confirmed. Furthermore, companies without an immediate termination clause could turn to the courts to end the agreements. What measures are being evaluated by the licensed companies? Lawyer Bernardo Freire, who represents betting companies, explained the measure’s potential impacts on contracts. “It alters the contractual premise. My companies have this clause to terminate contracts—most of them do. You have to provide notice and terminate.” In his view, Congress should discuss the matter. The lawyer believes the situation is not urgent enough to warrant a decision via Provisional Measure. Consequently, he foresees potential litigation should the measure be issued. In addition to contract termination, companies may sue the government for any losses incurred. The government itself recently regulated the sector and established an authorization period for the operations of betting companies. “The damage is already done (even if there is a provisional measure and Congress later reverses it). Will the publicly traded company return to this market? The cost to the government could reach R$ 120 billion,” he analyzed. According to the lawyer, the proceedings could take into account the revenues projected for the next three years and four months. This is the period guaranteed by the concession granted by the government. The aforementioned estimate is R$ 35 billion in annual revenue. Furthermore, the companies could demand the reimbursement of concession fees. These payments had contributed R$ 3 billion to public coffers. Thus, even before the signing of the Provisional Measure, the potential legal effects were already reverberating among clubs, sponsors, and betting companies. O post Government may ban online betting; betting companies notify football clubs of possible contract termination apareceu primeiro em iGaming Brazil.