Major Brazilian soccer clubs are experiencing a severe crisis, after the sports betting companies that are their biggest sponsors were banned, leading to the suspension of multi-million dollar deals. Thanks to the great financial support of their betting sponsors, Brazilian clubs have dominated their competitors in South America in recent years, winning the last seven titles in the Copa Libertadores Cup, equivalent to the European Champions League.
President Luiz Inacio Lula da Silva, who is locked in a fierce election contest against right-wing Senator Flavio Bolsonaro on Friday, signed a temporary decision to ban online betting companies, describing this sector as a “cancer.”
Points that will be at stake
14 of the 20 clubs in the Brazilian Premier League (Brazilerão) have a betting company as main sponsor.
This money represented 34 percent of the clubs' commercial revenues in 2025, or about $200 million, according to the investment company Galapagos Capital.
Flamengo Club, the holder of the Libertadores Cup and the Brazilian League, has the largest annual sponsorship deal in the history of South American football with Betano, worth $46 million. This amount is equivalent to what the club paid this year to include midfielder Lucas Paqueta, which sets a new standard in South American markets.
Flamengo club president Luis Eduardo Baptista asked in a podcast following the ban: “How will I pay for Paquita?” He added: “This action jeopardizes future revenues, the contracts we have signed, and the payments we must make.”
What will happen now?
The Lula Initiative ordered the removal of betting ads after October 5th.
A source in the Ministry of Sports told Agence France-Presse that a meeting between the government and the clubs that was scheduled for this week has been postponed until after the first round of elections on Sunday.
The Senate has 120 days to decide whether to turn the temporary measure into law.
On Monday, the main associations in the betting industry asked the Supreme Court to suspend the measure, claiming that it was unconstitutional.
Lula stressed his position, saying: “Either I will put an end to the bets, or the bets will put an end to Brazil.” The president claims that betting companies represent only 7 percent of clubs' revenues.
What risks do clubs face?
Experts warn that clubs face the possibility of a decline in the value of their commercial assets, as well as the possibility of legal action being taken against them. Fabiana Bentis, from the Seu do Esporte Institute, which specializes in the sports industry, said: “A company that is burdened with debt, lacks legal stability and cannot fulfill its obligations, is suffering from a decline in its value.” Pedro Lourenco, owner of Cruzeiro, added that the loss was “very heavy.” He continued: “We are studying the situation and reviewing the accounts. “It is not easy to determine the extent of the loss today.”
However, Belo Horizonte FC will receive financial support from the Minas Gerais state government, which has announced assistance to local clubs that have lost their sponsors.
Fluminense president Mateus Montenegro said it would not be easy for the clubs to replace these sponsors. “It is clear that this reduces the value of the asset,” he told CNN Brazil. “Because any company interested in sponsoring a football club will have almost all the clubs available at the same time.”
Flamengo said in a statement that revenues from online betting “have pushed Brazilian football to the point of domination” in South American competitions.
Betting sponsorship for Brazilian clubs appeared in 2019, filling the void left by the state-owned Federal Bank Caixa Economica.
This sponsorship has since been translated into 12 out of 14 Brazilian clubs reaching the finals of the Copa Libertadores competition. According to the specialized website Transfermarkt, 9 out of the 10 most valuable clubs in the region play in the Brazilian league.
