Il Nuovo Postiglione - Brazil football clubs face massive sponsorship blow from betting ban

Flush with cash from their betting sponsors, Brazilian clubs have in recent years dominated their South American rivals, winning the last seven Copa Libertadores titles.

President Luiz Inacio Lula da Silva, who on Sunday is facing a tight election race against right-wing senator Flavio Bolsonaro on Friday signed a provisional measure banning online betting companies, dubbing the industry a "cancer."

This is what is at stake:

- How much do clubs rake in? -

Fourteen of the 20 clubs in Brazil's top-flight Brasileirao have a betting company as their main sponsor.

That money accounted for 34 percent of clubs' commercial revenue in 2025, or around $200 million, according to investment firm Galapagos Capital.

Flamengo, the reigning Libertadores and Brasileirao champion, has the biggest annual sponsorship deal in South American football history with Betano, worth $46 million.

That is equivalent to what the team paid this year for midfielder Lucas Paqueta, setting a new benchmark in the South American market.

"How am I going to pay for Paqueta?" Flamengo president Luiz Eduardo Baptista said on a podcast following the ban.

The measure "puts future revenue, the contracts we have signed and the payments we have to make at risk," he said.

- What happens now? -

Lula's measure orders betting adverts to be removed after October 5.

A meeting between the government and clubs this week was postponed until after Sunday's first-round election, a Sports Ministry source told AFP.

The Senate has 120 days to decide whether to turn the provisional measure into law.

The main betting industry associations on Monday asked the Supreme Court to suspend the measure, alleging that it is unconstitutional.

Lula has doubled down saying either he "puts an end to betting, or betting will put an end to Brazil."

The president argues that betting companies account for "just" seven percent of clubs' revenues.

- What are the risks for clubs? -

Experts warn that clubs face a possible devaluation of their commercial assets and potential legal action.

"An indebted company, a company without legal certainty that cannot honor its commitments, suffers a devaluation," said Fabiana Bentes of sports industry institute Sou do Esporte.

The loss is "very large," said Cruzeiro owner Pedro Lourenco.

"We are looking at the situation and reviewing the accounts. It is not easy to quantify the scale of the loss today," he added.

The Belo Horizonte club will nevertheless receive financial support from the Minas Gerais state government, which announced assistance for local clubs that have lost their sponsors.

Fluminense president Mattheus Montenegro said it will not be easy for clubs to replace these sponsors.

"It is obvious that this devalues the asset, because any company interested in sponsoring a football club will have almost all the clubs available at the same time," he told CNN Brasil.

- How will this impact Brazil's regional dominance? -

Flamengo said in a statement that revenue from online betting has "propelled Brazilian football to the point of dominating" South American competitions.

Betting sponsorships of Brazilian clubs emerged in 2019, filling a space left by state-owned bank Caixa Economica Federal.

Since then, 12 of the 14 Libertadores finalists have been Brazilian teams.

According to specialist website Transfermarkt, nine of the 10 most valuable clubs in the region are in the Brasileirao.

M.Lombardi--INP