In an unprecedented move, Flamengo are offering odds on their ‘in-house’ betting platform Flabet and encouraging supporters to gamble on the club’s own matches. Will this be a new trend, elite clubs having their own betting brand?
By Sam Kunti
Amid all the questionable sponsors at the Club World Cup, at Flamengo’s matches against Espérance de Tunis, Chelsea, Los Angeles FC and Bayern Munich, one brand stood out, hiding in plain sight and escaping everyone’s attention. On the hoardings, long-time Fifa partner Qatar Airways was enticing travellers to splash out on their next trip. The target audience of Saudi Arabia’s Public Investment Fund’s tagline ‘Invested In Better’ was somewhat more nebulous.
On Flamengo’s shirt, Flabet wanted you to gamble. Brazil’s leading club with more than 40 million supporters, is taking Flabet to the world. At Lincoln Financial Field in Philadelphia, the team of manager Filipe Luis, the former left back of Chelsea and Atlético Madrid, wore the famous red-black shirt with Flabet plastered over the front. Bruno Henrique came on as a substitute twice to reinforce Flamengo’s attack, with a decisive cameo against the London club. Earlier in June, Brazilian prosecutors said they want the Flamengo forward in court for fraud, accusing him of spot-fixing – the act of deliberately causing an event in a match for the benefit of betting – in a match against Santos in 2023, the year that he served as an ambassador for BetPix365. His brother, Wander Nunes Pinto Junior, is suspected of involvement in the scheme in which Henrique allegedly arranged a late booking. Flamengo did not suspend Bruno Henrique, maintaining the position that he has a right to defend himself and that he has not been convicted by any tribunal.
So, instead, Henrique and Flamengo went to the USA to showcase the club’s ‘in-house’ betting platform to a worldwide audience.
Brazilian bonanza
Flabet reflects how the betting industry has skyrocketed in Brazil in recent years. Sports betting is just about everywhere. From the beaches with flyby advertisements to Maracanã’s metro station plastered with ads – betting operators are omnipresent. Even after the explosion of online betting following the Covid-19 pandemic and Brazil’s introduction of legislation that requires operators to have a Brazilian licence, novel manners to entice punters are invented.
Last August, Flamengo launched Flabet, in partnership with Pixbet, one of Brazil’s biggest betting operators. Flamengo has licensed the club’s name to Pixbet. In many ways, Flabet is unique – no major other club has an equivalent. The Rio-based club introduced what a leading law firm in Rio, where Flamengo vice-president Marcos Motta is a partner, described as a potential trendsetter.
In an opinion, lawyers Udo Seckelmann and Pedro Heitor de Araújo wrote: “The replication of this strategy by other sports entities could signal an emerging trend where the ability to identify and exploit regulatory gaps becomes essential to maximising revenue-generating opportunities in the sector.”
Flabet represents a lucrative new revenue stream for the club. According to iGamingBusiness, Pixbet is set to pay Flamengo at least 82.5 million Brazilian reais or 13.2 million euro over the course of their agreement, which runs through 2027. Additionally, the club may earn a royalty equivalent to 1 percent of gross gaming revenue (GGR), provided this amount exceeds the guaranteed 82.5 million Brazilian reais.
`Super odds`
The Flabet case raises ethical and legal questions and points to an industry that is increasingly under-regulated: should a football club be involved in such operations at all? Should an ‘in-house’ betting platform offer odds on its own matches? Is it a potential danger for the integrity of the game? Can it tempt the club’s players, like Bruno Henrique, to make some ‘easy’ extra income?
Flabet offers in-play betting on Flamengo matches. Before kick-off, bettors registered with Flabet sometimes receive electronic messages that encourage them to bet on the club’s matches with ‘super odds’. A fortnight ago, Gremio versus Flamengo in the women’s Brazilian top flight was live on Flabet.
Following the passing of Pope Francis, Flabet offered odds on who would become his successor. Pietro Parolin was the frontrunner with odds of 2.50.
In Brazil, article 3 of law 14790/23 stipulates offerings must be limited to fixed-odd events or online games. Offering odds on the identity of next Pope is a criminal contravention in the sense of law 14790/23. The Ministry of Finance’s Secretariat of Prizes and Betting (SPA) suspended Pixbet and Flabet in relation to technical requirements but not because of the odds on the Pope.
Declining to comment on individual cases, SPA said: “Regarding possible betting themes, in Brazil, Law No. 14,790 of 2023 established that only real sports-themed events and virtual online gaming events may be the subject of fixed-odds betting. Given the legal nature of betting, as a lottery modality and, as such, a public service, this list should be understood as restrictive, thus, other objects not provided for in the Law cannot be offered by fixed-odds betting operators authorized in the country.”
The SPA’s Ordinance No 827 – a federal regulation – stipulates that only limited liability companies or corporations are eligible for licences and controlling shareholders or partners of operators are not allowed to hold a direct or indirect interest in a professional sports organisation. Flamengo is run as an association. The idea then that Flamengo generates revenue through Flabet walks an extremely narrow legal tightrope.
In Rio de Janeiro, Pixbet and Flabet have local licenses from the Rio de Janeiro state lottery (Loterj) as the state does not ban civil associations from such activities. This generated a conflict between federal law and state regulations. In February, Brazil’s Supreme Court ruled that Loterj cannot issue licenses outside its state borders. The attorney general stated previously that Loterj’s national licenses undermined the federal structures and fair competition. Through Pixbet, Flabet enjoys a national license.
Is Flabet however a violation of the Fifa Ethics Code? Article 28.2 of the Ethics Code outlines that “Persons bound by this Code shall not have any direct or indirect financial interest (through or in conjunction with third parties) in activities, such as betting, gambling, lotteries or similar events or transactions connected with football matches and competitions” but Fifa, when asked by Josimar, failed to provide clarification.
With Flabet, Flamengo seems to have inspired other clubs. In the Serie C, Londrina, structured as a Sociedade Anônima do Futebol (SAF),a public limited company, launched “Bet do Tuburao” in partnership with Esporte365. The club’s website says that Londrina is a partner in the operation and that the revenue will be directed toward the club’s development. But article 28 ordinance SPA/MF 1231 stipulates that betting operators cannot have a partner or stakeholder “that participates, directly or indirectly, in a SAF or professional sporting organisation, nor a person who serves as director of a Brazilian sports team.”
The Brazilian Institute of Responsible Gaming (IBJR) is unequivocal. In a comment to Josimar, IBJR wrote “that any association between betting operators and sports clubs is a clear conflict of interest and represents a violation of constitutional principles and current legislation, especially Law No. 14790/2023. The use of the brands “FLABET” and “Bet do Tubarão”, with clear reference to Flamengo and Londrina Esporte Clube, respectively, is a notorious example of a strategy that violates both regulatory standards and the constitutional principles of equality and free competition, by granting an undue competitive advantage to the aforementioned betting operators.”
The IBJR added that Flabet and Bet do Tubarao can be perceived as deceptive: “This association leads consumers to believe that the clubs are directly involved in betting operations, which compromises the perception of impartiality in sports competitions and generates uncertainty regarding the legitimacy of the results, putting the public’s trust in the integrity of the events at risk. In this sense, the use of these brands not only violates the principles of equality and free competition in the sector, but also goes against the principles of responsible gaming and the protection of the popular economy, by associating the practice of betting with the emotional identity of the fan, exploiting the public’s emotional bond with their favourite team.”
(*) Josimar was able to access Flabet from France and the United Kingdom among other jurisdictions where the bookmaker is unlicensed.
Flamengo and Fifa did not reply to Josimar’s questions. Pixbet could not be reached.
