Next December 3rd-4th, at the Pacaembu Football Stadium in São Paulo, the OGS Brazil brings together industry providers, operators, regulators, key politicians and authorities to discuss current and future developments in the regulation of Online Gambling and Sports Betting in Brazil. With 2018 elections at both Federal and State level expected to result in the renewal of as many as 1/3 of the current legislative assembly members, the prospects for both online and sports betting regulation are expected to come back on the legislative agenda in Brazil.
GMB - With what expectations do you get to the Online Gaming Summit Brazil, an unprecedented event for our market? What will your panel be about?
Pedro Trengrouse - My expectation is that the Online Gaming Summit Brazil will promote discussions and exchange of knowledge that will contribute to the country's progress in regulating the gaming market in Brazil, especially sports betting, which are already moving more than R$ 4 billion (US$ 1.05bn) per year, with around 500 sites offering bets on national competitions.
Is this kind of knowledge-sharing meeting something that the country needs to prevent the population from being misinformed about the false "dangers" of gaming?
No doubt. The lack of regulation of online betting, for example, puts the popular economy and the integrity of Brazilian sport at risk. 13 years ago, an investigation by the Federal Police led to the annulment of 11 matches of the Brazilian Championship by manipulation of results. In 2017, thousands of bettors were left without prizes because the operators did not honor bets on the results of the 13th round of Serie A, in which visiting teams won the majority of games, significantly increasing the prize pool. In addition, this foreign exchange evasion compromises the National Treasury, which does not collect taxes and suffers from the negative impact on the trade balance.
Can you advance some of the ideas or data you will present to the public on your panel?
My presentations present a diagnosis of the current situation of the Brazilian gaming market and concrete suggestions so that it can be developed with responsibility and efficiency. The lotteries and gambling industry has significant vulnerabilities for organized crime and money laundering. The regulatory environment is fundamental so that this activity can be safely carried out. A study by the University of Nevada Las Vegas on the relationship between gambling and organized crime points out that the most effective way to combat illegal gambling, organized crime and prevent money laundering is through good regulation, effective monitoring, and effective control. In practice, legal gambling fights illegal gambling.
The Brazilian market for lotteries and games currently moves at least US$ 13.2 billion per year. The offer of lottery tickets in capitalization bonds, US$ 5.8 billion (44%); federal lotteries, US$ 3.95 billion (30%); state lotteries, US$ 92.5 million (0.7%); turf, US$ 79.25 million (0.6%); sports betting, US$ 1.05 billion (8%); jogo do bicho, US$ 80 million (6%); casinos, US$ 80 million (6%); and bingos, US$ 620 million (4.7%), noting that the most reliable source for estimating the movement of unregulated gambling is the IBGE's Household Budgets Survey, where the people themselves declare their spending, most likely that the numbers are underestimated.
Online gaming seems today to be the fastest growing modality in the world. Why do you think this is happening? Is traditional gaming business at stake?
There is room for every type of game, provided there is smart and efficient regulation. If the Government is a good conductor, the orchestra does not stand out. The online gaming, however, has been showing significant growth because of the increasingly digital habits of modern society. Radio has taken 38 years to reach 50 million people; the TV, 13; the internet, 4; Google, 100 days. Today, 1 billion people interact daily through Facebook. In 2010, 1.8 billion people were connected to the internet today, 3 billion. Until 2025 the UN predicts that the whole world will be conected.
The speed of transformation in the modern world is increasing. It is fundamental that the gaming activity is understood as a social phenomenon and, therefore, subject to evolution in harmony with society. eSports, skill games and online are the contemporary trend but there is still room for all modalities, which need to be properly regulated so that they develop fully.
How do you evaluate the progress of online gambling in a legislative level in Brazil? Do you think that by 2019 we will have an open and regulated market?
Hope so. Brazil can not wait any longer. The legislator needs to deeply discuss the lottery and gaming market in Brazil, so that it can generate relevant social and economic benefits, as well as mitigate the risks inherent in the current regulated and unregulated lotteries and games movement. Getulio Vargas Foundation study, requested by the Ministry of Finance to Caixa Econômica Federal, points out that the mature market of lotteries and games in Brazil, with due regulation for all modalities and environment conducive to its development, can move annually R$ 174.7 billion (US$ 46.15bn), with bets per capita totaling R$ 765.73 (US$ 203) and tax collection of R$ 58.78 billion (US$ 15.5bn).
As an illustration, in the United States, the economic impact of the casinos industry is estimated at USD 240 billion / year, generating 1.7 million jobs, US$ 38 billion in taxes and relevant externalities in the tourism industry: Las Vegas receives more than 43 million visitors a year. Japan, which currently owns 4.5 million pachinko slot machines, one for every 28 inhabitants, has already initiated the process of granting 3 licenses to Casinos Resorts. In Colombia, lotteries and games move 1.5% of GDP. In Macau, the largest market in the world today, the game raised GDP from US$ 7 billion in 2002 to US$ 45 billion in 2016.
How do you imagine that the new government led by Jair Bolsonaro will address the gaming market in the country?
The President-elect, Jair Bolsonaro, has always criticized that Brazil has never adopted liberal principles, based on the defense of individual freedom against the intervention of State power. Now he has the opportunity to use such principles to end this absurd and authoritarian prohibition of gambling in the country, supported by the New State Constitution and never even voted in Congress. Moreover, one of his promises is precisely to prioritize growth and job creation. The smart and efficient regulation of the gaming industry in Brazil is a tool for this and Bolsonaro has had the courage to address innovative issues without dogma, with responsibility, objectivity and transparency.
For further information, contact Talita Vitale | +55 11 3893-1336 | [email protected]
Source: GMB
