Chile Sports Betting Ban Leaves Soccer Teams With Fewer Sponsors

Posted on: September 18, 2023, 08:23h. 

Last updated on: September 18, 2023, 11:22h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Supreme Court justices in Chile’s highest court decided last week that almost all sports betting operators active in the country are operating illegally. As anticipated, the ruling is impacting Chilean sports, most notably its soccer industry, with teams breaking their sponsorship agreements with the sportsbooks.

The HQ of Chile's National Professional Football Association
The HQ of Chile’s National Professional Football Association. It has to call off its sponsorship agreement with Betsson following a sports betting ban in Chile. (Image: Carlos Figueroa Rojas)

The Supreme Court, in a 5-0 ruling, dealt a massive blow to online betting operators and soccer with its decision. Many of those operators support local soccer teams, as well as the main national championship. The only company that avoided being caught in the net was the state-run gaming and lottery agency, La Polla Chilena de Beneficencia.

Notably, Betsson and Betway are likely to be hit the hardest by the decision. Betsson has paid big money to be part of Chilean soccer, and Betway was the primary sponsor of a handful of local teams. Both operators are now sidelined.

Betsson Loses Huge Ticket

The news of the ban reverberated around the globe, reaching all the way to Malta and Sweden, where the operations and shareholders of Betsson are located. The company paid $2.5 million to the National Professional Football Association (ANFP, for its Spanish acronym) to get its foot in the door, later increasing its contribution to $8 million. The previous sponsor of the championship, financial institution AFP Planvital, paid $500K for the same rights.

In Argentina, since the beginning of this year, Betsson has sponsored Boca Juniors in an agreement worth $7.5 million. It also sponsors clubs in other countries, including Spain and Peru, and is the naming sponsor of the latter’s League 1. Betsson is also behind the Pernambuco Championship in Brazil and sponsored the 2021 Copa América tournament.

The contract with the highest body of Chilean football had already been faltering before the Supreme Court issued its ruling. On August 31, the Undersecretariat of Justice ordered the ANFP to void any contract that bound the association with Betsson within 30 business days. It also had to eliminate any reference to the company on its website and in any other public media, as well as rename its First Division A and B championships.

The ANFP opposed the decision and hired a lawyer to present an appeal of that order. However, after the Supreme Court stepped in, everything came to a halt, and ANFP is now breaking its contract with Betsson.

Betway to Hit the Highway

Virtually all local soccer teams have an online betting operator as a sponsor on their shirts, all of which have been declared illegal by the Supreme Court. Any attempt to sidestep the order and maintain a contract could lead to legal and financial issues.

Local media outlet El Mercurio reported that five teams, Unión La Calera, Everton de Viña del Mar, Ñublense, Audax Italiano, and Coquimbo Unidos, will break up with Betway. They had jointly announced their sponsorships in January 2022, becoming the first to ink such deals. Others have since joined them, with Unión Española the only team in the National Championship without one of these platforms as a sponsor.

Sports rights management company 1190 Sports, the intermediary between the teams and Betway, notified the teams to end the sponsorship relationship. They’ll reportedly finalize their separation in the coming days after contacting Betway and opening a dialogue about what happens next.

There’s no complete data on the total value of the combined sponsorships or how much Betway has already delivered. Each contract, including that of Betsson, will have to be reviewed individually in order to determine financial liabilities and reimbursements, if any.