GMB - What are the reasons for RGA's visit to Brazil?
Pierre Tournier - We have come to Brasilia primarily to share the KPMG study that we have commissioned about the regulation and taxation of online gambling in Brazil with relevant officials within the Parliament and the Government. In addition, the RGA has acquired extensive experience about the regulation of online gambling with lawmakers and gambling regulators across the European Union and beyond, and we have also come to Brasilia to explain how governments around the world have successfully established effective regulations in their own countries.
With what Brazilian authorities did RGA met and which was the result of those talks? Did you notice the leaders with knowledge on the subject or still need more information?
We are having meetings with Senators, Deputies, and senior officials in the government, especially the ones who are more involved into the discussion on gambling regulation. We appreciate there is a need for more education around the regulatory issues related to online gambling, including taxation, money laundering, responsible gambling and sports integrity. We are of the view that a continuous effort will have to be made in the future with the view to creating a sufficient level of knowledge amongst all the relevant stakeholders.
Can RGA physically help to create the needed regulatory framework? Could it send personnel to work in Brazil?
The primary objective of our visit in Brasilia is to establish contacts and create relationships with those officials who are working on the building of gambling regulations in order to share our expertise. We will continue to feed into the work that is being done in Brasilia either from distance by sharing best practices from other markets or by coming to Brasilia wherever appropriate. We are not a commercial entity, but a non-profit trade association whose mission is to improve the knowledge of the online gaming sector.
What are the main aspects of the KPMG report that should be of concern to leaders in Brazil?
There are two main findings that political leaders should primarily look at in the KPMG report, i) an estimate of the potential size of the online gambling market in Brazil, and ii) an estimate of the tax revenues that could be generated by reducing the size of the existing illegal market; these objectives can be achieved if online gambling was regulated properly, according to the international best practices. It is important to stress that, for the first time in Brazil, the figures published in the report have been estimated thanks to a solid and thorough methodology, and we hope this will help the government when taking its own policy decisions.
What tax collection system would be more favorable according to the report for the country?
The KPMG report concludes that a Gross Profit Tax would be the best taxation system for the online gambling industry in Brazil, as in any other country that wishes to put in place an attractive system that would be beneficial for consumers, the industry, and the Government.
Do RGA members have a strong interest in entering this market once regulated?
There is a strong interest for Brazil among the RGA members but ultimately the decision to enter the market will be made by companies individually based on their business strategies and the conditions set out in the legislation.
How does RGA see the gaming legalization process that the country is going through?
We appreciate that this is a lengthy process and much remains to be done before we have a piece of legislation that can be satisfactory for all. Although there seems to be a consensus around the need for regulation, there is still a lot of uncertainty about the public policy objectives pursued (e.g. how to prevent problem gambling, match-fixing or money laundering) and the means to achieve them. Most European countries have successfully faced the very same issues in the past, and that is why we think it is important to share those experiences with the Brazilian policy makers.
After legalization, do you imagine that the process of regulating the industry in Brazil would be complex? Would it be done in a short or long time?
We are of the view that once a law is adopted, the online gambling industry could be regulated within a relatively short period of time without much resources and staff. There is no need to reinvent the wheel, but it would be sufficient, and extremely beneficial, to import and adapt the existing international best practices.
Brazil is today a country with a large-scale illegal game ... how would the legal gaming sector fight that enemy?
If the regulatory conditions prove to be reasonable and acceptable by operators, the regulated market will capture a large number of companies which will apply for a licence and operate in the country. Customers will then naturally turn to legal operators which will offer them a much higher level of confidence and protection. This is exactly what happened in several European countries, such as the UK, Italy, Spain or Denmark, where the size of the illegal market is now very marginal. Under these conditions, we are of the view that the use of enforcement measures such as Internet Service Providers (ISP) blocking measures will remain less relevant.
Have you measured the volume of the Brazilian market in numbers? Where would you rank it in the international context?
According to the KPMG report, the online gambling market is estimated to be 7,3 billion Reais per year. If Brazil's market were regulated in a sensible and workable manner, it could potentially become, in one year, the world’s second largest regulated online gambling market (after the United Kingdom), also setting an example to follow for other jurisdictions in Latin America.
Source: Exclusive GMB
