Almost a year after its entry into force, the sports betting law in Brazil is still awaiting regulation. But the government says to local media giant Globo that is about to put a decree on the street, according to Alexandre Manoel Angelo da Silva, National Secretary for Public Policy Evaluation, Planning, Energy and Lottery at the Ministry of Economy (SECAP/ME). Initially, this would come out between December and January.
Regulation is on top of a law that is seen as "average". The government has already mobilized to improve it, especially regarding the tax burden on companies, but has not yet succeeded. In any case, the formulation of the decree advances, having as its pillars the protection of the popular economy, the integrity of sport and the encouragement of the improvement of the business environment.
What is the current government perspective for sports betting regulation?
The Ministry of Economy has up to two years to regulate fixed-odds sports betting, which is one of the lottery modalities. We will regulate in the coming months. It can be in December or January. Twenty people work on it.
What kinds of bets come into this?
In Brazil, only lotteries and draws are legalized, a mode in which you associate the lottery with horse racing. Sweepstake is regulated but does not work. The Numerical Prognosis Lottery mode has recently been granted to the private sector. There is the Sports Prognosis modality, divided into two strands: the variable quota and the fixed quota.
In the fixed one, the operator, in the act, already informs how much you can earn. The variable is the one that Caixa already operates, Loteca and Lotogol, and you only know when you can win when all bets are closed. This is already legalized. Congress has already passed the competence to the Ministry of Economy to regulate.
What about other types of games like casinos and bingo?
Last year, the then Ministry of Finance gave approval only to insert a missing lottery modality in the Brazilian market. These were no other game modalities. Casinos, bingo, poker and other activities need to be dealt with by society. If society wants it, it doesn't even have to ask our opinion. I am not a legislator. As a civil servant, I can only do what is in the law. So, I deal with lottery and sweepstake, which have been legalized in Brazil for many years.
The government makes moves to change the law that came into force in December. How did this intention come about?
Senator Luis Carlos Heinze (PP-RS) came with two companies and said the sweepstake was not working. We are perfecting to make it work. We need to match the market for things to work out. We issued a first decree in June. We first asked, with a questionnaire, to know what the market wanted. There were more than 1,800 contributions.
With them, we observed that the law in force was not suited to best practice and that we would have to improve it to best practice in the world, such as England and Italy. These are markets that have already undergone improvements. We do not want to make the mistakes they have made. We made a draft decree based on the contributions and released for public consultation. But for this decree to exist initially, it would have to perfect the law, which came into force in December.
Is the receptivity of updated ideas good?
In the second contribution, the response was great. Three of the top ten bookmakers came here in person, explained everything. We want to go for the clubs themselves. Not even Flamengo has in its uniform a site among the 50 largest in the world. None of these Series A sponsor sites are large ones. We want to bring the biggest ones to sponsor the clubs here.
What has been the response of clubs to proposed regulations?
They were pleased with a new source of funding. They gave support. We are trying to attract better companies that could contribute even more. They will earn a share of the lottery revenue. Of the physical sales, 2% goes to the clubs. From online, 1%. But these direct resources represent the smallest part football will gain from regulation. Because websites are interested in sponsoring clubs and doing business. Both to foster the company in the market and to build the loyalty of club fans.
As government has stepped out of football's sponsorship, it will be a great opportunity to bridge the gap via the private sector. This also drove us to regulate this law. These companies, in addition to betting, can do specific deals, such as betting rights. The club may give exclusive transmission of games on the site to the operator. Power to generate business. The more modern the law, the bigger the business generated.
As for its content, what is the main problem?
Our law is not bad. It is average. It could be better, but we’ll regulate a law in a market that is starting. The coming companies will be able to fight with the government for the modernization of the law. The major drawback with others is that taxation could be more attractive. It is the focus on Gross Gaming Revenue (GGR), which is gross revenue minus paid prizes. In adjusting the law, we want to tax between 15% and 26% on average. In the current law, depending on the margin that the operator uses, is between 30% and 39%. We will continue to give flexibility in choosing how much is chosen from awards and how much stays in the house. It will only make a steady contribution to the government. Physical bet is 6%. In online, 3%.
About the adjustment in the law, what stuck you in Congress?
After the endorsement of world operators, we went to Congress to begin mending the existing law. Deputy Hugo Motta (PRB-BA) would be the rapporteur. In Brazil, there are people who mix things that should not be mixed. In the Plenary, some mixed. They used the legislation that already exists as if it were legalizing gambling, bingo, casino. And that did not work. Modernization will only go when it is jointly. We argue that the Congress has to discuss. Regulating what we have will facilitate the discussion.
Lotteries modes in Brazil
Numerical Prognosis Modality
It includes Mega-Sena, Lotofácil, Quita, Lotomania, Dupla Sena, Dia de Sorte, Loteria Federal and Timemania, which yields 22% to football clubs.
Instant Mode
Lotex fit into this category.
Sports Prognosis Modality
It has two subdivisions. The first, fixed odds, is one in which the gambler knows in advance how much to win if he hits - the online sports bet itself. The second has variable odds: the player only knows how much he wins after the betting is closed (Loteca and Lotogol).
Sweepstake
It is the lottery whose result is linked to the result of a particular horse race match. This modality has already been regulated, but there is no company that operates it in Brazil. Therefore, the government also intends to make adjustments to the decree to attract stakeholders and improve business competitiveness.
Source: Igor Siqueira - O Globo
