The offensive power of Atlético Mineiro, which gave them the titles of state, Brazilian and Copa do Brasil champions in 2021, was also a reason for celebration thousands of kilometers from Belo Horizonte. Each of the 136 goals of the team led by striker Hulk was, indirectly, also from Betano, a sports betting site whose logo is wide open on the front of the team’s jerseys.
Also sponsoring Fluminense and foreign clubs such as Braga and Benfica, among others, the platform belongs to a Maltese company, Kaizen Gaming, today with administrative headquarters in Athens. With operations in seven countries – Greece, Cyprus, Romania, Portugal, Germany, Chile and Brazil -, it sees the green-yellow market as one of the most promising in the world and hopes to fall on the lips of the Brazilian people by associating itself with football.
It’s not the only one. Currently, 33 of the top 40 football clubs in the country are sponsored by such websites. In September, Botafogo started to display on its jersey the logo of the Costa Rican EstrelaBet, which still supports Coritiba and Vila Nova. The following month, Vasco closed with PixBet. Registered in Curaçao, in the Caribbean, this platform also allocates its marketing funds to Ponte Preta, Goiás, Avaí, América and Juventude, and has the narrator Galvão Bueno as its ambassador.
Of the 20 teams that played in the first division of the Brazilian Championship in 2021, 19 were sponsored by betting sites – the only exception was Cuiabá. Supporter of four powerful clubs – São Paulo and Flamengo and the English Arsenal and Southampton -, Sportsbet.io, also from Curaçao, hired former player Denílson, world champion with the national team in 2002, as brand’s ambassador. Sportingbet, which belongs to a company listed on the London Stock Exchange, Entain, has engaged MMA champions Lyoto Machida, Fabricio Werdum and Wanderlei Silva for an advertising campaign.
Outside Brazil, there is no shortage of sponsorship cases for clubs and sporting events. Three England football teams – West Ham United, Leicester and Brighton & Hove Albion -, in addition to Paris Saint-Germain’s eSports division, receive funds from Betway, from Malta, which also supported the Miami Tennis Open this year.
In the land of the queen, the second most important football tournament takes its name from one of these sites, Sky Bet, from the United Kingdom itself. There, according to the University of London, ads from such platforms are usually seen between 70% and 90% of the broadcast time of BBC’s “Match of the Day”, the most relevant football show in the country.
Today, about 450 such sites operate in Brazil. The ten largest, according to Ibope Monitor, invested almost US$ 12 million in advertising in the country in the first half of 2020. In the same period last year, this figure rose to US$ 75.7 million.
The jump is explained, in part, by the impact of social isolation on the pandemic, which favored online sports betting. Just like streaming platforms, they have become one of the main hobbies for many people since the new coronavirus spread across the world. It is estimated that the sector has grown, globally, about 40% between 2019 and 2020. In 2020, according to Grand View Research, it generated US$ 59.6 billion worldwide. With an estimated growth of 10.1% each year, on average, it could reach US$127.3 billion in 2027.
“In the Brazilian sports segment, more than 30% of investments in media today are made by betting companies,” says André Gelfi, CEO and partner of Betsson in Brazil. “Basically, all of them are anticipating the regulation of the segment in the country. That’s why they invest so much in awareness and brand building, anticipating competitive advantages.” In Salvador, according to a Google survey, searches for the subject on the internet have increased by 130% in the last two years – the capital of Bahia state is one of the 15 cities most interested in sports betting in the world.
They were authorized in Brazil by a law enacted in 2018, during the presidency of Michel Temer (MDB). But the rules that license the activity were missing, which, by law, need to be defined by October 2022. This is why practically all companies in the segment with operations aimed at Brazilians are not formally rooted in Brazil – nothing that the internet and international transactions can’t get around.
“In short, we have a national demand that is supplied by an international supply,” says Gelfi. “It is very easy to place a bet on foreign sites, almost all of which have pages in Portuguese. But with an ‘offshore’ market, Brazil does not tax taxes, in addition to not inspecting the segment.” It is estimated that the Brazilian government, which promotes sports betting through the Federal Lottery, fails to raise R$ 500 million a year thanks to the lack of rules for the activity.
Gelfi is at the head of the only large platform in the industry that has a CNPJ. “Regulation is imminent,” he bets. “It is no secret: if Betsson is in the country it is because, with the licensing perspective, it sees the Brazilian market as one of the most thriving in the world.” According to the executive and other sources, sports betting already moves R$ 10 billion a year in Brazil. “In the years following the regulation, this figure is expected to jump to up to R$100 billion a year, and I’m known for being conservative,” he adds.
Of Swedish origin, Betsson owns 20 brands, from casinos to betting sites. It landed in Brazil in 2019 by acquiring 75% of the extinct Suaposta website, from 2016, of which Gelfi is one of the founders. “I concluded that it made more sense to partner with a major player to have access to technology, know-how and investments,” he recalls. “Even without regulation, we already have an extremely competitive market.” Suaposta was transformed into the local arm of the multinational.
In the football world, the company sponsors the Chilean national team and Íbis Sport Club, a team from Pernambuco that is considered the ‘worst in the world’ – gained fame for going 3 years and 11 months without winning a match. The company has also supported Milan and Internazionale, the Copa América and the World Cup qualifiers.
Betsson’s national site currently only offers live horse racing betting, legalized in Brazil since 1988, and a fantasy game based on several football leagues – this type of entertainment also has legal support. “Like any Brazilian business, we withhold and pay all taxes due,” informs the CEO of Betsson in Brazil. When the regulation comes, the company will also offer bets on other sports, such as volleyball, tennis and more, already available on the company’s international website and on those of the competition.
To venture into any of them, users simply register their e-mail and password and declare that are over 18 years old. Transactions are made by credit card, bank slip or Pix. As a rule, internet users can guess who will be the winner of each match as well as the result and other details, such as the number of cards, fouls and corners, in the case of football. Most sites also make room for less popular sports such as cross country skiing and chess and for the world of eSports – the League of Legends tournament is one of the most attracting bids.
The success of this universe is the reason for the existence of several virtual communities dedicated to debating and predicting results. With more than 80 employees, Ortega Tips is a kind of club for those who want to increase their chances of success when placing their bids. “There are already six months of profit for 14 thousand people, and our acceptance is 96%”, informs Pedro Ortega, who runs the business (he is a former participant of the reality show “De Férias com o Ex Brasil”, from MTV). The plans offered cost from R$120 to R$597 per month and even involve analysis of greyhound racing.
For Alex Fonseca, country manager in Brazil at Kaizen Gaming, which controls Betano, the lack of regulation is one of the main obstacles to the growth of sports betting in the country. “Massive investment by large companies in the field depends on legal and fiscal security,” he says. “In addition to barring the entry of international companies, which could generate formal jobs in Brazil and increase tax collection, the lack of regulation favors the performance of small operators without any structure and leaves gamblers susceptible to fraud and data leaks, among others other threats.”
One of the most obvious risks is the manipulation of results, a crime that the scandal known as the “whistle mafia”, in 2005, made famous. That year, 11 Brasileiro Championship games refereed by Edilson Pereira de Carvalho were canceled and played again – the initial results would have helped certain bettors, involved in the scheme, to profit.
“The absence of rules contributes negatively,” summarizes Fonseca. “In several countries, our industry is one of the biggest generators of employment and income. We already have a huge expansion plan for Brazil that involves strong investments in marketing. Support for social programs is also part of our DNA. We contribute to charities in every market in which we operate.”
In September, Englishman Paul Merson, a former footballer who played for Arsenal and the UK national team, exposed the darker side of sports betting. Now 53 years old and earning a living as a commentator, he revealed he became addicted to them and lost the equivalent of R$50 million, money he hoped to spend on buying a house for himself and his family. “It was 36 years of pure madness,” he declared. “People say, ‘Oh, you lost all that money. But money is irrelevant. You waste time. Time passes, and it breaks my heart more than anything.”
To prevent betting enthusiasts from becoming addicted to them or resorting to them in an unhealthy way, Betsson has created tools that use artificial intelligence to minimize risks when playing. The user, for example, can choose a period from 24 hours to six months to deactivate their account and under no circumstances they can reactivate it within the selected range.
The platform also interrupts the player to constantly notify him of the time he has spent playing – he is only able to play again if he consents to the notice. An online test was also created to assess whether the Internet user has developed a problem with betting. And deposit limits protect everyone from spending more than they can afford. All this, of course, is of no use if the gambling addict migrates to another platform. And nothing stops him from doing that.
The regulation under discussion does not involve gambling, which has been banned in the country since 1946 by determination of former president Eurico Gaspar Dutra (1883-1974) – he gave in to the appeals of his wife, Carmela Dutra (1884-1947), Dona Santinha, who saw gambling as immoral. Coincidentally, Congress returned to focus on the liberation of casinos, bingo and jogo do bicho.
The idea never got off the ground due to opposing pressure from evangelical parliamentarians. With the economic crisis caused by the pandemic as a backdrop, however, some congressmen believe that it is a good time to put their cards on the table again.
According to Brazil’s Legal Gaming Institute, legalizing gambling could formalize at least 450,000 jobs and create another 200,000. Expected revenue from taxation of gambling: R$ 20 billion per year, in addition to R$ 7 billion from grants for casinos, bingos and slot machines. “The general movement of betting in Brazil is around R$ 71 billion per year, and unregulated games represent R$ 27 billion of this amount,” says Magnho José, who presides over the entity.
Of the 50 American states, 44 allow casinos to operate. Together, they generate an annual impact on the US economy of US$261 billion, by the accounts of the AGA, the industry association. According to the same entity, the country’s betting industry as a whole earned US$ 43.6 billion in 2019, a record, and is about to surpass that figure in 2021, after the expected drop last year.
“Two consecutive quarters of record revenue is an incredible achievement in any context and even more so after the most challenging year in the industry’s history,” said AGA’s President. Considering only sports betting – online is only authorized in some states, such as New Jersey and Pennsylvania -, the sector earned US$ 5.3 billion in the first nine months of 2021. It represents an increase of more than 200% compared to the same period in the previous year.
In the country of Las Vegas, Betsson landed in June 2020, by entering into an agreement with Dostal Alley Casino in Colorado. It’s what allowed t to start profiting from online bidding in the country, considered the most promising for sports betting sites – the second is Brazil. “When states like New York and Florida give their approval, the segment will exceed US$ 30 billion a year,” believes Gelfi.
Numbers like this aroused the interest of a not insignificant player in the entertainment sector, Disney. In September, the company’s chief executive, Bob Chapek, told investors at a conference that the company plans to be “aggressive” about operating in the sports betting market. “Let’s say our fans are really interested in sports betting. And let’s say our partners are interested in sports betting,” Chapek said. “So we’re interested.”