Backlash Over Crypto Deals in Elite Soccer After Man City Locks Out 3Key
Posted on: November 22, 2021, 04:43h.
Last updated on: November 22, 2021, 10:10h.
Faced with the threat of losing revenue streams from gambling advertising, elite soccer teams are increasingly looking to commercial crypto deals to offset the expected hit.
But on Friday, reigning EPL champion Manchester City was forced to suspend its partnership with crypto start-up 3Key. That’s after individuals named as executives by the company were found not to have a digital presence.
The incident raises serious questions about the kind of due diligence teams are undertaking before they accept sponsorship cash. It’s particularly concerning in the semi-regulated cryptocurrency space, which has become notorious for its bad actors.
Embarrassingly for City, 3Key’s apparent lack of corporate transparency was first exposed by internet sleuths last week, just days after the deal had been done.
“Manchester City conducts due diligence in respect of all of its partnerships,” City said in an official statement. “Manchester City’s partnership with 3Key Technologies has been announced but has not been activated in respect of any specific products or services in any part of the world.
“Prompted by the club’s interactions with 3Key Technologies in recent days, Manchester City is now conducting further inquiries regarding 3Key Technologies, and the partnership has been suspended pending satisfactory resolution to all of those inquiries.”
‘Financial Barrier’ to Fan Engagement
Meanwhile, fan groups claim some crypto deals – especially so-called fan token partnerships (FTPs) — are little more than a cynical attempt to exploit supporters.
Ostensibly, they claim to let fans have some say in the running of certain aspects of a team if they purchase crypto tokens. But the groups say FTPs offer little of value and deny they empower fans.
Crypto-based fan token partnerships are either trying to monetize trivial matters that could easily be solved with online polls of season ticket holders, or inserting financial barriers into genuine supporter engagement,” a spokesman for the Football Supporters Association (FSA) told The Daily Mail. “Neither is a good look.”
UK lawmakers are expected to sever financial ties between soccer and the gambling industry as part of an ongoing review of the country’s gambling act. This season, eight out of 20 EPL teams have jersey sponsorship deals with gambling companies. But 17 also have “official betting partners” who get branding in stadiums and on websites.
There are concerns this could lead to financial hardship for teams still battling the economic impact of the pandemic. This is especially the case in the lower tiers, where the reliance on gambling industry sponsorship is even more pronounced.
Bad Look for Barca
Spain has already imposed a ban on gambling advertising in soccer, and La Liga teams are also looking to crypto deals to plug the gap.
Barcelona was also forced Friday to abandon a deal with crypto company Ownix. That’s after one of the latter’s consultants, Israeli businessman Moshe Hogeg, was arrested on suspicion of perpetrated a large scale cryptocurrency scam.
Hogeg is also accused of money laundering, theft, and fraud, as well as crimes related to “sexual and moral turpitude” that are currently subject to a gag order.
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