ABAESP is a nonprofit body that seeks to defend the rights and interests of its members as well as companies, operators and other entities seeking to see the Brazilian sports betting market positively regulated. The association arises from the need to have an active and institutionalized voice to be able to also intervene and opine on issues that will directly affect the sector, such as regulation. ABAESP's main objective is to protect members, consumers, partners and the gambling community as a whole.
The founding members of the Association are mostly public figures in the Brazilian sports betting scene and have more than a decade of experience in sports betting, and thus carry extensive knowledge about the gaming industry, nationally and internationally, in addition to having a wide range and penetration with the gamblers, thus being able to bring to a large part of the community the information pertinent to the causes they defend.
GMB - Who came up with the idea and how did ABAESP was created? How does the association try to help in this process of legalizing the gaming sector?
Rodrigo “LocoBets” Alves - The Association arose from the need for bettors and others interested in sports betting in Brazil to have a voice in this process of legalization and regulation of bets. The idea was a collective mobilization, as at least three other attempts to unite had been made in the past. But with the December 2018 legislation that legalized the activity, our efforts focused on finally getting it off the ground. Our help in this process is to bring insight into those who effectively know, operate, and work with sports betting on a daily basis. After all, no one is better than gamblers and their operators to know the needs and specifics of this activity.
Founding members have years of experience in sports betting in Brazil. Did you already know each other? Are you all players from different gaming sectors?
We are sixteen founding members, and most have at least five years of experience in sports betting. We had known each other for some years and the initial invitations to join the Association were over 40 guests. Soon ABAESP will be open to receive new members, who will be able to participate with their technical and professional knowledge, opinion and financial contributions, and so we are sure that we will have even more scope to claim and help shape sports betting in Brazil. Particularly I started betting in 2008, my area of expertise has always been punter betting (the one where you bet directly against the bookmaker), but in addition to punters ABAESP also has sports traders (where you bet with other bettors through betting exchanges), and with content developers with great penetration in the national scene.
What importance do you see in the scenario of opening Brazilian gaming legislation?
Staying in the gray market, while comfortable and functional for gamblers and traders, seemed to us no longer a viable thing. It was necessary to evolve to have a legalized activity, with proper consumer protection, sanctions to bookmakers who act irresponsibly and unequally with their clients, as well as to take away this old and mistaken view that the gambler is a financially irresponsible person. Those who effectively treat the activity seriously can live on it. The sports bettor is much closer to a stock market investor than a ludopath. And that’s why it is necessary not only legalization, but mainly a technical regulation made by those who really understand the activity.
Much is currently being discussed about regulation. Many worries that game manipulation will be greatly increased when sports betting is legal in the country. What is ABAESP's position regarding this issue after-legalization? How can players have confidence in the integrity of games?
The big losers from manipulating results are: sports in general, bookmakers, and gamblers. The first ones for being affected in its suitability and reason for existing. The second because it is who actually pays the bill for such manipulations. And the third for being a victim of outside agents that make them lose their money. As such, and around the world, traders are keen to combat manipulation, and for this they have large companies that monitor betting results and movements and must necessarily be part of this post-legalization scenario. And these partnerships should not be limited to operators, but also to Sports Federations and Confederations, as well as by the Government itself. Manipulation like any other crime only benefits its perpetrators.
Why do you think it is crucial that there is no taxation on gamblers? How do you suggest income taxation be done in these cases?
There are a number of factors that make taxing the gambler a wrong choice by the legislator. Encouraging illegal market use through unpaid offshore gambling sites is one of them. And this will happen especially with the players with higher purchasing power, who usually receive prizes over R$ 1,903.98 (US$ 465). One of the consequences of this, is the creation of a market that stimulates the recreational and losing gambler, as the professional and profitable will have to look to other ways to continue placing their bets. Another aspect is that equating (as it was done) the sports bettor with the lottery bettor, is to show total ignorance of the specificities of sports betting.
As I previously said, if the sports bettor is equated with some kind of "gambler", then it should be like the stock market. In addition, there are more practical and day-to-day issues concerning how this tax will be discounted by the trader on the prize amount, or even how to differentiate between a conventional prize and one that comes with a welcome bonus (as this is subject to a rollover). At the same time, the player is taxed when he wins, but it is disregarded what he loses, regardless of whether in the short or medium term the player has suffered loss in all of his market entries. There are other aspects to be addressed, but I will limit myself to these considerations. In successful models like the UK Gambling Commission, the gambler pays no tax on his prizes, regardless of the value. Also, because the tax imposed on the operator, is already partially passed on to the bettor on the odds provided by the bookmaker.
With the bill pending in the House, do you see companies that want to invest in Brazil and bring a variety of products?
There is no doubt that operators and other gambling companies want to be part of the Brazilian market. And this is not from today. We have at least three elements that can make us one of the world's greatest powers in gaming activity: emerging market, population size, and passion for sports. And so almost any company that can meet the requirements for a gambling license will do so. And many will do so without even accurately wondering whether the proposed terms (such as the questionable 1% turnover tax rather than the globally consolidated GGR) will make the operation viable or not.
Brazil has the immense privilege of regulating betting only in 2019, and with that there are dozens of regulatory models to base it on. Many models are terrible and serve as examples not to be followed. And as many as the UK, Malta and Colombia are great, and should serve as the north. But interestingly, it seems to us that Brazil is not taking advantage of this unique opportunity to follow the best and most consolidated regulated markets.
What products should be offered within the regulation so that gamblers do not seek out the illegal betting market?
We understand that the adult public should have ample freedom to place bets on what they want. Whether in Caixa's lotteries, the casino, or who will win a football match. But within the sphere of sports betting, it is essential that in addition to fixed odds betting (as is the letter of the law), it is also explicit that betting on betting exchanges is also fully possible. Sports trading is a booming activity, and quality regulation can never fail to observe that activity.
The quarantine period is not supported by ABAESP. Why?
Sports betting has been taking place for over a decade in Brazil. To somehow want to close the market during this regulatory process would do much more harm than good. Regulate the market, stipulate the rules, and once the licenses start to be issued, the websites and bookmakers that operate here and do not comply with the proposed rules will be effectively illegal. But before that, there is no need for a blackout period in a market that is already thriving like Brazil.
Source: Exclusive Games Magazine Brasil
