Posted on: March 14, 2022, 06:55h.
Last updated on: March 14, 2022, 06:55h.
FC Barcelona is not going to suspend or break the agreement it has had with Russian betting platform 1xBet. The soccer club apparently has too much money at stake to risk losing the sponsorship.
A number of sports organizations and gambling companies distanced themselves from Russia and Russian companies following the country’s invasion of Ukraine. Others, like the UK’s Chelsea, didn’t have a choice. Sanctions against the team’s owner forced it to take a stand.
However, not everyone is on board the anti-Russia train. FC Barcelona is holding on tightly to its sponsorship agreement with Russia-based sports betting platform 1xBet. Once Spain’s leading soccer club, the organization’s financial situation has forced it to dance with the devil.
Barcelona’s Finances in Disarray
Although the continuation of the agreement is unjustifiable by most standards, Barça is going through its worst economic moment in history. This is the main reason why it will continue to count on 1xBet as a global sponsor.
The company that arrived to replace Betfair is one of the five that contribute the most money to the entity, with almost €9 million (US$9.83 million) per season. This can increase to €12 million (US$13.1 million) with certain achievement. The sponsorship agreement last until 2024.
Joan Laporta, Barça’s current president, has decided to go ahead with 1xBet to balance the 2021-2022 accounts and to avoid having to indemnify the organization. This is despite the fact that the club, which is developing its own cryptocurrency and non-fungible token (NFT), had established a positive net profit forecast after the red numbers of last season.
In addition, when the arrival of Spotify as a sponsor is made official, the club only has 29 contracts. Two of these, Rakuten and Beko, expire this summer.
To justify not breaking off 1xBet, which has alleged ties to pornography, piracy and illegal gambling in the past, Barça rationalizes that the company’s headquarters is Cyprus.
Ostracized Everywhere but Barça
1xBet can’t even operate legally in Russia after it lost its license there almost two years ago. That was a result of the scandal over its alleged illegal activity.
Its founding partners are Serguei Karshkov and Román Semiojin. They are two businessmen who were convicted in their country, along with Dimitri Kazorin, for scams related to illegal gambling. Interpol has the trio on its list of most wanted criminals.
An investigation by the Sunday Times uncovered that the brand had ties to the promotion of children’s sports betting, cockfighting and an online porn casino with topless croupiers.
The British government denied the license to 1xBet, which was also among the main sponsors of illegal sports broadcasting platforms. Russia also discovered that Karshkov, Semiohin and Kazorin illegally operated in the country through software monitored from Gibraltar. That is why they face a six-year prison sentence and asset forfeiture.
Before associating itself with Barça, the bookmaker reached agreements with Premier League clubs Tottenham Hotspur, Liverpool and Chelsea. All of them broke their agreements immediately. Shortly after, Barça closed a deal at the beginning of the 2019-2020 financial year.
Laporta is between a rock and a hard place. He reportedly doesn’t want to sign new contracts with bookmakers, but doesn’t want to lose millions of dollars, either. In addition, the entity explains that this bookmaker does not have much visibility through official channels; even more so since the government clamped down on betting advertising.
Barça will reportedly drop 1xBet, provided new sponsorship agreements arrive to make up the difference. Until then, it’s willing to align itself with a company whose operations fit the same narrative of the country where it was founded.