Flamengo, one of Brazil's most beloved football clubs, is considering launching its own betting platform "Flabet," breaking away from traditional sponsorship agreements.
Flamengo plans to submit the Flabet proposal to the club's decision-making committee. The club will sign a licensing agreement with Pixbet, who will operate Flabet. If approved, Flamengo will receive at least 82.5 million reais (about 15 million USD) over the next four years.
Ambitious Financial Forecasts
The financial forecasts are quite ambitious. According to the proposed agreement, Flamengo will receive 10 million reais (1.7 million USD) in 2024, 22.5 million reais (4 million USD) in 2025, and 25 million reais (4.5 million USD) each year in 2026 and 2027. The club's board is even optimistic about revenues exceeding these forecasts, given Flamengo's large fan base and extensive digital coverage.
Flabet will not be limited to betting on Flamengo. It aims to offer betting options on various teams and sports, similar to existing betting platforms.
Unprecedented in Brazil
In Brazil, it is the first time a football club has licensed its brand to a betting operator. However, this practice aligns with the global trend of sports organizations exploring diversified revenue sources through brand partnerships.
Legal and Regulatory Considerations
According to Brazilian Law No. 14,790, which regulates sports betting, it generally prohibits operators from directly or indirectly owning shares in football clubs or professional sports organizations. This law aims to prevent conflicts of interest and ensure the fairness of sports and sports betting.
Critics, including Rafael Marchetti Marcondes, legal director of the Brazilian Betting Industry Association IBJR, believe that the Flabet arrangement could be seen as an attempt to circumvent these regulations. Marcondes thinks that allowing such partnerships could set a concerning precedent that might undermine the regulatory framework designed to prevent match-fixing and corruption.
Despite these concerns, Pixbet is expected to now apply for a federal license. A broader legal interpretation and application of federal licensing rules will be crucial to whether the Flabet proposal can proceed without violating existing regulations.
The Impact on Flamengo and Brazilian Football
For Flamengo, creating Flabet could provide a significant new source of revenue. With over 59.5 million followers on major social media, Flamengo's promotional power could bring substantial traffic and engagement to Flabet.
As Flamengo's decision-making committee prepares to vote on the proposal, the outcome could influence similar initiatives by other Brazilian football clubs and sports organizations.
