“How am I going to pay for Paquetá?” – West Ham dragged into Brazil’s betting ban crisis

West Ham could face a problem over the money still owed for Lucas Paquetá, with Flamengo now preparing to warn them about January’s payment.

The Brazilian club bought Paquetá for €42.5m (£36.9m) earlier this year. They agreed to pay West Ham through three promissory notes. The second of those is due in January 2027.

This week, Flamengo president Luiz Eduardo Baptista (called ‘BAP’) has publicly questioned how his club will make that payment. And that’s because Brazil’s suddenly banned betting companies from operating in their territory – and it has put a huge hole in their projected revenue.

There are now reports in Brazil that Flamengo are actually preparing to contact West Ham and say they currently cannot make the January payment.

Flamengo preparing to warn West Ham

Gilmar Ferreira, writing for Brazilian newspaper Extra, reports Flamengo are getting ready to communicate their situation to West Ham.

The problem centres around the club’s huge sponsorship agreement with betting company Betano.

Its owner, Kaizen Gaming, pays Flamengo around €49m (£42.5m) annually. However, the contract reportedly allows a review or termination if outside action prevents betting companies from operating in Brazil.

Ferreira says there has already been an informal indication that the partnership could be terminated. He stresses this isn’t official yet.

Under the current scenario, Flamengo would have to return around €11.4m (£9.9m) already received from the sponsor.

There’s a rather unfortunate coincidence for West Ham here. That’s roughly the amount Flamengo need for the next Paquetá payment in January. BAP had already made the situation very clear in an interview relayed by ESPN.

“How am I going to pay for Paquetá in January?” he said. “I took on an important commitment for Flamengo. Everything Flamengo does is within the law. But this measure compromises future revenue.”

He later went further, saying Flamengo currently cannot honour commitments made on the basis of those contracts.

The club will look for new sponsors, although Baptista believes companies outside the gambling industry won’t offer comparable amounts.

West Ham know the betting sponsorship issue – Brazil’s case is very different

West Ham have some experience in moving away from betting sponsorship.

The Premier League announced in April 2023 that clubs had collectively agreed to remove gambling companies from the front of matchday shirts. Crucially, clubs were given until the end of the 2025/26 season to make that transition.

Brazil’s situation has been much more abrupt. President Luiz Inacio Lula da Silva’s government had previously regulated the betting industry and established a licensing system. Clubs consequently signed lucrative agreements with companies legally operating in the country.

The government has now moved to prohibit fixed-odds betting altogether. That sudden change is at the heart of BAP’s complaint. Flamengo budgeted around contracts which were legal when signed and now face losing one of their biggest revenue streams.

The impact on Paquetá isn’t theoretical anymore. Flamengo’s own president has specifically identified the West Ham payment as a problem.

There were suggestions the financial situation could even lead Flamengo to give Paquetá back. That’s apparently not happening though.

Bolavip Brazil say they’ve been told Flamengo completely rule out returning the midfielder to West Ham, even if the Betano sponsorship ends. Paquetá remains an important part of their plans.

So West Ham currently have an unusual situation to deal with. Flamengo intend to keep the player, while reports say they’re preparing to warn the Hammers they cannot make the next scheduled payment.

January is still three months away and Brazil’s betting ban faces political and legal challenges.

That gives Flamengo time to find an answer. As things stand, though, West Ham have very good reason to keep a close eye on what happens in Brazil.