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Major Brazilian football teams may be forced to suspend lucrative sponsorship deals with one of the most prominent online betting brands in Brazil after Curaçao-based Esportes da Sorte was not included on the Brazilian regulator’s whitelist of temporarily approved operators.
Football giants Palmeiras, Corinthians and Grêmio were among clubs reported to be reviewing their legal options after their sponsor Esportes da Sorte was conspicuous by its absence from both the initial and an whitelist of betting operators published by Brazil’s Ministry of Finance on Tuesday and Wednesday (October 2).
Having rapidly become one of the leading brands in Brazil’s unregulated market, Esportes da Sorte was among 113 operators to apply for a federal licence from the finance minister’s Secretariat for Prizes and Bets (SPA) before an August 20 deadline.
But the company is arguably the most prominent operator, along with Stake, not to cut the whitelist of sites that may continue operating in Brazil through to the end of this year as their applications remain under review.
Brazil’s whitelist was updated late on Wednesday evening to include four additional operators, which the SPA said were initially left off due to administrative errors.
The regulator has not disclosed why Esportes da Sorte was not included, but it is unlikely to be a coincidence that the omission follows last month’s high-profile arrest of CEO and founder Darwin Henrique da Silva as part of an investigation led by prosecutors in the northeastern state of Pernambuco.
Da Silva’s family is widely reported to be involved in operating jogo do bicho numbers in Pernambuco and the investigation centres on accusations of money laundering and illegal gambling.
Company executives have strenuously denied the allegations, pledged to cooperate with police and stated that Esportes da Sorte is committed to complying with all forthcoming regulations for online betting in Brazil.
The company has yet to comment directly on its exclusion from the whitelist, although reports in Brazilian media initially suggested Esportes da Sorte believed it to be an error that would soon be corrected.
In a statement accompanying the updated version of its whitelist, the SPA said certain licence applicants were not on the list because they had not submitted the necessary information.
There were a handful of cases, however, where “during the course of evaluating the documentation presented in the licensing process, information was identified through research using official and public sources that call into question … the suitability of the individuals and legal entities involved, as well as the origin and use of financial resources”.
“Given the government’s duty of care to protect the national interest and the interests of society, the companies in this group will not have their activities recognised as legitimate, for the purposes of the transition period,” the SPA added.
The regulator also indicated in a new published on its website on Thursday that any ongoing police investigations will be taken into account as part of its review of licence applications.
In accordance with a September 17 ordinance, any non-whitelisted operators have until October 11 to allow players to withdraw their funds, before they then become subject to blocking and may no longer be advertised in Brazil.
One of Esportes da Sorte’s sponsorship partners, Atheletico Paraenese, has swiftly moved to suspend its contract with the operator in the wake of the development, although other clubs including São Paulo-based Corinthians and Palmeiras have stated that they are still evaluating the situation and seeking more information from the company.
The SPA’s whitelist is strictly for companies with pending licence applications that chose to submit details of the skins they currently operate in Brazil, so those platforms can remain active during a transition period that will expire at the end of the year.
It is not a list of approved licensees or an indication that any of the operators will definitely be licensed before the Brazilian regulated market launches on January 1.
Nor it is supposed to include any future brands that may launch under a Brazilian licence.
That is why, for example, the whitelist does not include the Brazil-facing BetMGM joint venture of MGM Resorts and Globo, Brazilian national lottery operator Caixa or the new betting arm of Brazilian conglomerate GSS that last week announced its intention to launch an online gambling platform through a partnership with OpenBet.
The SPA also stated that those applicants not included on the whitelist could still be licensed to relaunch in January, “if they comply with all legal and regulatory requirements”.
List Of Rio Licensees Grows After Court Injunction
Meanwhile, the publication of the Brazilian federal regulator’s whitelist has also resurfaced a simmering legal dispute over the scope of local licences issued by state governments in Brazil.
Late Wednesday, the SPA published an updated version of its second whitelist of 18 state-approved operators from Paraná, Maranhão, Minas Gerais and Rio de Janeiro.
The regulator stressed in its FAQ document published on Thursday that state-authorised operators are permitted to offer betting strictly within those states’ borders and that only companies licensed by the SPA may operate on a national basis.
That position is being actively challenged by the state lottery authority of Rio de Janeiro, however.
A 2023 licensing decree expressly authorises Rio-licensed operators to accept bets from players throughout Brazil, provided their players acknowledge that the transaction legally occurs in Rio de Janeiro.
State lottery LOTERJ won an injunction against the SPA’s enforcement ordinances from a federal court earlier this week, after a judge agreed that the federal regulations conflict with Rio’s pre-existing licensing rules.
In a statement published Thursday, LOTERJ noted that December’s federal law to regulate sports betting and online gaming included a provision that grandfathered any state licences or concessions issued under processes that commenced before mid-2023.
“Along with the list published by the [SPA], those betting sites authorised by LOTERJ will also be able to operate in all of Brazil,” the Rio lottery stated.
LOTERJ has so far issued a total of eight licences for 11 different sites, with at least three of those platforms approved within the past week.
That included a new licence that was issued on October 1 to VaideBet, just hours before the Curaçao-based operator became another prominent absentee from the SPA’s national whitelist.
VaideBet has similarly been implicated in the recent investigation into alleged money laundering involving offshore betting platforms.
A spokesperson for the company told Globo that the new licence from Rio de Janeiro “at this moment is considered valid for national operation. Therefore, VaideBet cannot be called illegal or prohibited, blocked or anything like that.”
