Chelsea FC in talks with Stake for Shirt Sponsorship Deal

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Chelsea FC in talks with Stake for Shirt Sponsorship Deal

The Sporting Crypto Newsletter is supported by The HBAR Foundation.

Usually, a simple sports sponsorship wouldn’t be a ‘headline’ that is worth covering as an entire newsletter edition.

However, the context within how this potential sponsorship between Stake.com and Chelsea FC has unfolded is pretty interesting.

Even more interesting, is the play that Stake founders are making outside of gambling, in streaming and Esports with Kick, as well as the backlash this specific potential partnership has seen.

In today’s newsletter, I cover:❓ Who are Stake?⚽ Sports Sponsorships and partnerships📖 Controversy and fan backlash🎥 Kick - streaming competitor to Twitch

❓ Who are Stake?

Bijan Tehrani and Ed Craven created Stake in 2017. Craven was recently named the youngest billionaire in Australia and made headlines when he purchased the most expensive home available down under. The online casino and sportsbook operates through a license in Curacao and uses crypto as the currency.

Users on Stake typically do not deal with traditional currencies, instead, they deposit and withdraw cryptocurrencies to and from their betting account.

So why Crypto rather than fiat-based betting?

The answer is probably regulatory arbitrage. 

But, in order to comply with UK gambling laws they were able to get a gambling license from the UKGC via Isle of Man agency TCP Europe.

They’re not the first, nor will they be the last company that starts in ‘grey’ territories that have more undefined regulation, and then become ‘more regulated’ as they scale.

In 2020, Stake generated over $100m in gross gaming revenues.

In the summer of 2022, they reported to have over 5 million customers and were, or are, doing close to 100 billion transactions per year. By this point, Stake had gross gaming revenues of over $2.5bn.

By March 2023, they had become the 7th largest gambling group by revenues globally, a pretty staggering statistic.

⚽ Sports Sponsorships and partnerships

Many will point to the aforementioned regulatory arbitrage as the first and foremost reason Stake have had such an incredible rise over the past 5 years.

But as per Nigel Eccles (via the FT), Co-Founder of Fanduel and now Betdex, said Stake’s success can be attributed to their aggressive marketing and being the “first truly global, crypto-only gambling site” 

And… ‘aggressive marketing’ might be an understatement.

Similar to many crypto exchanges, Stake have gone hard at sports in terms of partnerships, but also entertainment more broadly.

In January 2023, Stake agreed to become the title sponsor for Alfa Romeo’s F1 racing team — meaning they would be called Alfa Romeo F1 Team Stake. It is rumoured that the sponsorship cost $100m per year.

After announcing Stake as their title sponsor and lifestyle partner, Alfa Romeo F1 Team revealed that they were entering the streaming space by partnering with Kick.com. Kick.com, a Twitch competitor, is reportedly owned by Stake’s co-founders.

Stake have also onboarded UFC star Israel Adensaya, Drake, Sergio Aguero and a plethora of more world-renowned entertainment stars as ambassadors.

They have also invested heavily in English football, becoming front-of-shirt sponsors to Everton FC and Watford FC respectively, in the past.

They also have a sponsorship agreement with Indian Super League football club Mumbai City which sees it promote its surrogate online sports news platform Stake News.

But in their biggest splash since Alfa Romeo, Stake have made the headlines again by reportedly being close to signing a front-of-shirt deal with one of Europe’s biggest football teams, Chelsea FC.

Chelsea’s previous shirt sponsor Three, suspended their sponsorship when former owner Roman Abramovic was sanctioned by UK authorities.

Three’s deal was estimated to be worth £40 million-a-year to Chelsea and it’s believed that they rejected an offer from Allianz to become the club’s new sponsors for ~ half that rate.

According to several reports, an undisclosed suitor from the crypto sector were ready to step in and pay more than double Allianz, worth £44m per year, for three years. But it collapsed and now, Stake are close to securing the Premier League club’s front-of-shirt rights. According to SportsBusiness, the crypto company who backed out were not confident in paying a large proportion of the fee upfront due to concerns about the volatility of the crypto industry.

There were others in for this piece of premier league real estate, however.

Paramount+, Paramount’s streaming service, were ready to take on the sponsorship deal. However, this was reportedly refused by the Premier League, amid concerns it would upset the competition’s broadcast partners.

Now, it seems Stake have a free run, and with time running out for Chelsea to secure a sponsor this summer ahead of the next football season, it is likely this will go through.

Even though there is disdain for the deal amongst many Chelsea supporters.

Chelsea are actually also in the market for another shirt sleeve sponsor after their deal with crypto app WhaleFin was terminated just 6 months after its announcement, reportedly because the firm could no longer pay the sponsorship fees.

📖 Controversy and fan backlash

Premier League clubs have collectively agreed in April to withdraw gambling sponsorship from the front of their matchday shirts after the end of the 2025-26 season. So it has come as a surprise to many that Chelsea are likely to choose a gambling sponsor. Many others in the sports world have labelled it ‘pragmatic’ to give the club enough time to find an appropriately capitalised replacement by the beginning of the 2026-27 season.

But one thing is for certain, regardless of the commentary — Chelsea fans aren’t happy.

This week, the Chelsea Supporters’ Trust published the results of a survey with their members which found that 77% of fans disagreed with the use of a betting company as the club’s primary shirt sponsor.

In an open letter, they said:

“The Chelsea Supporters’ Trust [CST] does not believe that it is in the best interests of our members for Chelsea FC to associate with an online casino and betting company as the primary shirt sponsor,” 

The CST pointed to a variety of campaigns that had been led by either the club, the Chelsea Foundation or the CST; including a gambling awareness programme across local schools, and a mental health campaign called ‘Talk More Than Football Campaign” encouraging football supporters to talk about their mental health more openly.

To this, the CST said “An online casino and betting company as a primary shirt sponsor would make a total mockery of much of the previous work pioneered by The Chelsea Foundation” 

Football clubs get their fair share of backlash on decisions from fans.

But this is something that Stake are seemingly used to at this point. Often, they have been ‘risky’ with their promotion of the gambling platform and received plenty of criticism.

Last year, Everton told Stake to stop using their imagery to promote a $10 free bet for anyone who wagers $5000 in the space of a week.

It was widely criticised by many activists, journalists and fan groups in the UK.

In September 2022, Stake.com founders were hit with a $400 million lawsuit by a former associate who alleged he was cut out of the business.

That same month, popular streaming platform Twitch banned all gambling content after many top streamers raised ethical concerns.

🎥 Kick - streaming competitor to Twitch

Stake’s founders are also said to be linked closely to Kick, a competitor to Twitch.

To nobody’s surprise, Kick, unlike Twitch doesn’t ban gambling content… in fact, many top ‘slot streamers’ on Kick offer promo codes to Stake.com or other offshore casinos.

In fact, Stake sponsored popular Twitch streamer Trainwreck, as the creator broadcasted Stake.com casino games. However, after Twitch’s policy changes, he moved his sessions to Kick. It’s rumoured that Trainwreck was earning up to $1m a month via his Stake affiliation.

Kick have also been on an absolute tear recently, marketing extremely aggressively and using a 95/5 revenue split in favour of streamers which is far more lucrative than Twitch and YouTube for example.

They’ve also been aggressive in acquiring talent. They just signed xQc, a Canadian gaming streamer on a $100m, 2-year deal. The type of money most are only used to seeing in traditional athlete contracts. It’s as large as LeBron James’ current La Lakers contract. The crazy thing is, it’s not even an exclusive deal! xQc can appear on TikTok, YouTube or even Twitch if he chooses, but not nearly as often as he did prior to his deal with Kick.

Kick is averaging 110,000 livestreams a day, still dwarfed by Twitch’s seven million monthly streamers and 31 million daily viewers. If Kick continue with their aggressive acquisition, that gap should shrink.

🧠Concluding thoughts:

To summarise a lengthy newsletter that covered a lot of ground:

• Stake.com is a money printer, using regulatory arbitrage and loose territory-specific AML laws, alongside territories that have loose or grey gambling laws, to its advantage. They’re now a top 10 gambling operator in terms of revenue.

• They’ve been incredibly aggressive in their marketing, signing up megastars in entertainment and entering massive sponsorship deals with the likes of Alfa Romeo’s F1 team, and reportedly soon to be Chelsea’s front-of-shirt-sponsor.

• Chelsea’s supporters’ trust have written an open letter to the board opposing the potential deal.

• Stake have seen a lot of controversy with their gambling offers in the past, most notably when Everton, whom they sponsored, asked to not feature their IP in said offers.

• Stake have close ties to Kick, the Twitch rival who is going hard at the streaming market with megabuck deals. 

Stake won’t be marketing in UK football for long, but with their spreading influence across various facets of entertainment and culture, it’s hard to think they will care. With a seemingly never-ending bankroll, it’s hard to know where they, or their streaming friends Kick, will stop. I actually wouldn’t be shocked to see some sports broadcasts live exclusively on Kick in the next few years. If they’re able to overpay that massively to ensure a streamer hosts content on their site, why not a sports team or league?

On the other side we have sports fans who have shown great disdain for businesses like Stake, infringing on something they hold so dear. And rightfully so. I wonder if the Paramount+ story is something fed to journalists as a way to say “Hey, we didn’t want this, we had to — it’s the league’s fault!”. If it was the Premier League barring that deal happening, then, well — I struggle to see the sense of it. Especially if it could have stopped the inevitable friction we’re now seeing from Chelsea supporters.

Crypto has a big optics problem, especially when it comes to sports.

Businesses who have leveraged regulatory arbitrage go hard and fast and are more prone to breaking. But at the same time, if even the most legitimate entity out there in Coinbase is being sued by the SEC, the incentive to be the ‘good guy’ in crypto may not be what it once appeared to be. Hopefully, with increasing regulatory clarity globally (apart from the USA), there will be a greater incentive.

💡 Sporting Crypto Spotlight - Job of the Week

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General ‘Stuff’ that Could Impact You

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• Mark Cuban takes on SEC, John Reed Stark and ‘crypto derangement syndrome’ (Read more here)

• Binance, SEC strike deal to keep US customer assets in country (Read more here)

• a16z opening UK office as prime minister plans to make country web3 hub (Read more here)

• Thirdweb Plots Web3 Gaming Push With Ex-Facebook Exec Hire (Read more here)

• Great thread here on the current Reddit situations which is seeing mods revolt against the platform (Read more here)

• Netflix reportedly plans first live sports event with celebrities playing golf (Read more here)

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