Soccer Teams in Chile Face Reduction in Sponsors Due to Sports Betting Prohibition

September 18, 2023, 08:23h

The Supreme Court of Chile recently ruled that almost all sports betting operators in the country were operating illegally, which is having a significant impact on the Chilean sports industry, particularly soccer. This ruling has resulted in teams terminating their sponsorship agreements with 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’s unanimous 5-0 ruling is a major blow to online betting operators and the soccer industry. Many of these operators were sponsors of local soccer teams and the national championship. The only exception is the state-run gaming and lottery agency La Polla Chilena de Beneficencia.

Among the operators, Betsson and Betway are expected to be the most affected. Betsson has made significant investments in Chilean soccer, and Betway was the primary sponsor of several local teams. Both operators are now unable to participate.

Betsson Loses Major Opportunity

The news of the ban has reached Malta and Sweden, where Betsson’s operations and shareholders are based. The company paid $2.5 million to the National Professional Football Association (ANFP) to enter the market, later increasing it to $8 million. In comparison, the previous championship sponsor, AFP Planvital, paid $500,000 for the same rights.

In Argentina, Betsson has been sponsoring Boca Juniors with a $7.5 million agreement since the beginning of this year. It also sponsors clubs in other countries, including Spain and Peru, and is the naming sponsor of the Peruvian League 1. Betsson is also involved in the Pernambuco Championship in Brazil and sponsored the 2021 Copa América tournament.

The contract between Betsson and the top Chilean football authority had been under strain even before the Supreme Court ruling. On August 31, the Undersecretariat of Justice ordered the ANFP to terminate any contracts binding the association with Betsson within 30 business days. The ANFP was also instructed to remove any mention of the company from its website and other public media, as well as rename its First Division A and B championships.

The ANFP initially opposed the decision and hired a lawyer to appeal the order. However, after the Supreme Court’s involvement, all actions were halted, and the ANFP is now terminating its contract with Betsson.

Betway Faces Separation

Virtually all local soccer teams in Chile have had sponsorship deals with online betting operators, which have now been declared illegal. Any attempts to maintain these contracts could result in legal and financial consequences.

According to local media outlet El Mercurio, five teams – Unión La Calera, Everton de Viña del Mar, Ñublense, Audax Italiano, and Coquimbo Unidos – will terminate their partnerships with Betway. These teams had jointly announced their sponsorships in January 2022, making them the first to secure such deals. Other teams have since followed suit, with Unión Española being the only team in the National Championship without a sponsorship from these platforms.

Sports rights management company 1190 Sports, the intermediary between the teams and Betway, has instructed the teams to end their sponsorship relationships. They are expected to complete the separation in the coming days after reaching out to Betway to discuss the way forward.

The total value of the combined sponsorships and the amount already delivered by Betway is unknown. Each contract, including that of Betsson, will need to be reviewed individually to determine financial responsibilities and potential reimbursements.

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