Site: Superbet warns São Paulo over exit if government bans bets | OneFootball

The impending Provisional Measure (MP) by the Federal Government to ban online games and restrict sports betting in Brazil — the popular “bets” — has triggered a legal-protection movement in the entertainment and sponsorship market. And São Paulo could end up harmed in the process.

Several companies in the sector have begun sending extrajudicial notices to the boards of the country’s main football clubs, warning of the automatic termination of master sponsorship contracts in the event of changes to the national legislative framework, according to a report published by UOL this Wednesday (23).

The measure is gaining momentum amid the hardening of President Luiz Inácio Lula da Silva’s rhetoric regarding betting operations in the country. According to the website, Superbet — sponsor of São Paulo and Fluminense — has already notified both institutions about the possible termination of their contracts in the event of a government ban. Tricolor, however, did not confirm the notice from its commercial partner.

Esportes da Sorte also adopted the same procedure with its partner clubs, including Corinthians. In a statement, the black-and-white club’s board confirmed receipt of the document and described the notification as a preventive and procedural measure, reiterating that fulfilling the obligations becomes unfeasible under a legal ban and highlighting the maintenance of a good relationship with the partner.

Changes to contracts and legal uncertainty

Experts in sports law and representatives of the platforms emphasize that the enactment of an MP will substantially alter the legal basis of existing commitments.

“It changes the contractual premise. Most companies have safeguard clauses allowing them to terminate under these conditions; the notification is the initial step,” explained lawyer Bernardo Freire, representative of brands in the sector.

The legal expert challenged the Executive Branch’s choice of a Provisional Measure, arguing that the matter should be examined by the National Congress due to the absence of the constitutional requirements of urgency, and predicted a wave of legal disputes.

Budget impact and risk of billion-real lawsuits

In addition to the immediate loss of funds amounting to R$ 1 billion for Brazilian football, the sector is considering taking legal action against the federal government for losses and damages. The central argument is based on the fact that the companies made substantial investments and paid for operating licenses backed by the very regulatory process conducted by the State.

Estimates by industry analysts indicate that the overall cost of the litigation for the government could reach R$ 120 billion. This amount takes into account the collection of Gross Gaming Revenue (GGR) for the remaining period guaranteed by the licenses — projected at R$ 35 billion annually — plus the reimbursement of the R$ 3 billion already collected by the Executive Branch from the granting of operating licenses.

This article was translated into English by Artificial Intelligence. You can read the original version in 🇧🇷 here.