Joga Brasil and BetConsult assessed the current state of sports betting and the gaming industry in Brazil.
Brazil.- Joga Brasil shared an analysis on sports betting’s situation in the country. The local media outlet spoke with Edgar Lenzi, founder and CEO of BetConsult, founder and partner of the law firm LenziAdvocacia. He is also founder and president of ABRAGAMING – The Brazilian Gaming Association.
Edgar Lenzi’s analysis
At the end of May, as a result of a proposal by Evandro Roman, an important public hearing was held with the Sports Commission of the Chamber. The main topic was online gaming regulation, with particular emphasis on sports betting. It was an important time for experts and authorities to present their knowledge about regulatory procedures related to gambling around the world. Furthermore, how these experiences can be used in the regulation of gambling in Brazilian territory. During the Sports Committee meeting, REQ 37/19 was approved and the Special Subcommittee on Gambling and Online Betting Games was created at the initiative of Mr Evandro Roman. The objective with the creation of the Subcommittee is to stimulate further debate on the subject to reach a good regulation for the market and users.
To prepare for the market’s liberalisation, several foreign operators are already taking steps to launch. Many are already setting subsidiary companies in Brazil and selecting representatives for the market. Given that sports betting regulation may soon happen, it’s fair to say they’re right. If it is announced that licensing will soon happen, they will be ahead of others.
There are two potential models to adopt for licensing: a concession model or a permit model.
In the permit or authorisation model, multiple operators are allowed and competition between them is encouraged. In this model, the state gets money from collecting a relatively low amount in exchange for granting licences. In addition to taxes applied, it makes sense to encourage competition between operators, in order to obtain more fiscal resources.
In the Concession model, little or only one licence is granted to one or a few operators. In this model, the state benefits significantly from the licence’s sale but allows the creation of a monopoly or oligopoly. It limits the ability of the state to obtain tax resources.
As already mentioned, the Federal Executive Power has two years, extendable for another two years to carry out the regulation of the issuance and the granting of licenses, through the SECAP of the Ministry of Economy. However, the regulatory process should be carried out at the end of 2019, adopting the permit/authorisation model, to encourage competition between private operators, which complies with the liberal bias adopted by the current Brazilian government. It also takes into account the experience of the LOTEX Instant Lotteries, whose concession process has been extended for longer than expected.