The registration is simple: name, e-mail, telephone and city. The approval gives the right to a tablet, a small printing machine and opens the possibility of profiting from the commission on sports betting. Gaming in Brazil is forbidden, but something that is played everyday. Small websites sell the chance for easy money. A system that works - and yields profit - on the margin of regulation, without any gain for the coffers of the Brazilian State.
Leading market sites, with domains registered outside Brazil to circumvent the legal ban, profit from bets made in the country and reinvest money including sponsoring football clubs - not Brazilians, because the law does not allow it. In the streets, bingos are constant presence, although prohibited.
Faced with the economic potential of an unregulated activity today, the congressional debate on the regulation of gambling is growing, with two bills in the Senate and one in the House. The text under discussion in the Senate should not prosper, but the discussion in the House evolves. One of the exits pointed out by the mayor, Rodrigo Maia (DEM-RJ), is to restrict the project to the legalization of integrated casino resorts, an idea that divides proponents of regulation.
Estimates of those who defend legalization claim that the activity, currently banned, moves around R$ 20 billion (USD 6.1bn) per year in Brazil. If regulated, projections for the market point to the value of R$ 65 billion (USD 19.8bn), equivalent to 1% of Gross Domestic Product (GDP). Only online games (especially dominated by sports betting) generate in Brazil around R$1 billion (USD 305m) for companies, expecting to reach R$7 billion (USD2.15bn) in the hypothesis of legalization, according to a KPMG study delivered to Remote Gambling Association (RGA).
Proponents of market opening point to the potential for wasted tax collection and job creation. On the other side of the discussion, opponents cite the risk that crime will try to dominate the sector.
Without regulation and supervision, the gaming market opens up loopholes for situations such as that occurred in July last year. Six visiting clubs won their matches in the 13th round of the Brazilian football championship, raising the prizes to be paid and, literally, breaking the bank of small, popular sites especially in the Northeast. "This game ended today, because the smallest bank had a loss of R$2 million (USD610k)," says a money changer in an audio that circulated in WhatsApp, published by the magazine Trivela. GLOBO attempted to contact two of these smaller sites, but calls were turned off when the reporter identified. Among the main sites in the market - mostly from European companies - there are no liquidity problems, and the volume of money in circulation allows the activity to stop being a hobby and become a profession.
“Today I live exclusively on this (of betting on football games). The first thing is to overcome the emotional factor. The error is the immediacy. I do not know if I'm going to make money today, but I know that in December I will be positive,” says Fábio Bampi, a bettor who does not quote values, but says that he profits between 15% and 30% of what he invests.
In the advertisements that occupy much of the intervals of sports transmissions on TV, the bigger betting sites appear like vehicles of statistics. The commercials carry the inscription "this is not a betting site" and direct to addresses that provide odds on matches of several championships. A simple search, however, leads to the real deal: bets, developed in domains registered in countries where gambling is allowed. Founder and CEO of a website until last year, Leonardo Batista, explains the mechanism.
“They are always companies established outside the country, and the big operators are European, with licenses from the respective countries where there is regulation. It's a completely legal operation. I think it is ridiculous that Brazil does not legalize, because in countries where regulation has taken place, the impact on the economy has been extremely beneficia,” he argues.
President of the Legal Gaming Institute in Bazil, Magno José, corroborates the statement:
"We can not continue to ignore the fact that we have a very strong illegal gaming operation without compensation (for the state)," he says, and estimates that around R$ 19 million (USD 5.8m) could go to public coffers (based on a 30% over the potential market of R$ 65 billion -USD19.8bn-).
PROSECUTOR DEFENDS STATE STRUCTURE
Republic’s Prosecutor, Peterson de Paula, who is studying the issue, points to one issue: calculations on possible financial benefits to the government should take into account the expenses for setting up a regulatory body and hiring servers for oversight.
“In the United States, the regulatory system is as heavy as that of banks. This means that it will be necessary to create a state structure. How will you expand the gameplay modalities in the country, in a context of constitutional amendment, that makes it impossible to increase costs in cost?”
Still in the discussion of the accounts, economist Ricardo Gazel, a doctor from the University of Illinois, says that the numbers presented by sectors favorable to legalization are inflated:
“What research shows is that the phenomenon of cannibalization usually occurs: those who play do not spend on other activities. What happens is the transfer of spending from one sector to another.”
The need for a strong supervision, in a legalization scenario, is defended by the lawyer Pedro Trengrouse, who accompanies the discussions of the sector.
“It is necessary to establish the regulatory environment of each modality and to create an efficient mechanism to combat money laundering, reducing the space for organized crime. It is necessary to advance in the discussion on the subject, because you can only fight illegal gaming with legal gaming.”
While discussing legalization, a casino in Porto Alegre works based on a local court decision. The case has already gone to the Federal Supreme Court (STF).
“The operation of a house with bets in the state is illegal. The activity is being carried out irregularly. That said, my personal opinion is that there is a great deal of hypocrisy on the issue, because the prohibition of gambling does not result in crime reduction,” according to Rio Grande do Sul Security Secretary, Cezar Schirmer.
Without entering into the merits of legalization, the Secretary of Economic Monitoring of the Ministry of Finance, Mansueto Almeida, defends the expansion of the area of federal lotteries - the collection was R$14 billion (USD14.25bn) in 2017. Last Wednesday, the Court of Auditors Union gave ligth to Lotex concession. The government intends to publish until May a notice that will allow the participation of private operators in the lottery market, breaking the monopoly of the Caixa Econômica Federal.
“The Brazilian lottery market has a great avenue to grow,” believes Almeida.
Source: GMB / O Globo
