GMB - What will be the tasks of the new commission?
Flavio Zveiter - The lottery and gaming industry has significant vulnerabilities for organized crime and money laundering. The regulatory environment is fundamental so that this activity can be carried out safely and the OAB is able to contribute a lot in this.
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, efficient monitoring and control effective. In practice, legal gambling fights illegal gambling.
We intend with the Commission to act proactively on several fronts and to promote a broad debate on the different types of games, so that in the short term we can achieve a regulatory environment that is safe for all involved. We intend to organize academic events, actively participate in the discussions in the Congress and with the government bodies and everything else that can be done so that Brazil finally has a proper regulation for gaming.
Besides you, who are the lawyers that make up the commission?
The committee has Pedro Trengrouse as vice-president, who is a reference in the topic. We also hope to have great lawyers who already have work in the area. Ives Gandra Martins, for example, has already written about special tax regime for gaming and several opinions on bingos and lotteries; Eros Roberto Grau recently gave an opinion about gaming to finance charities and Miguel Reale Jr. made an excellent opinion about poker.
How was it born and what was the idea of OAB in creating this commission?
The idea was born of the article signed by the President of the Federal Council of the OAB, Felipe Santa Cruz, with the Vice-President of the Commission, Pedro Trengrouse, published in O Globo newspaper in late 2018 requesting clear rules for the gaming activity in Brazil.
Tell us a little about your career and your experience in the field of gambling...
I am a member of the FIFA Ethics Committee where I participated in some panels involving manipulation of football matches in the world, and in all of them there was the participation of groups that practice sports betting illegally. Studying the subject I learned that the lack of regulation is fertile environment for the practice of the so-called matchfixing, but the regulation, on the contrary, can help in the development of the sport since it can create a new source of revenue. Recently I wrote together with Pedro Trengrouse an article published in SOCCEREX where we defend that a percentage of the revenue obtained with the bets is reverted to the organizers of the competitions in order to develop mechanisms to control integrity.
How do you analyze the legalization process of the gaming sector in Brazil?
Brazil is far behind in this and needs profound changes in its lottery and gaming market so that it can generate relevant social and economic benefits, as well as mitigate the risks inherent in illegal gambling.
Getúlio 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, has the potential to move annually US$46.95 billion, with per capita bets totaling US$205.85 and tax collection of US$15.8 billion. Even though these numbers are overrated, we're talking about billions of dollars.
For example, in the United States, the economic impact of the casinos industry is estimated at US$240 billion/year, generating 1.7 million jobs, US$38 billion in taxes and relevant externalities in the tourism industry: Las Vegas receives more than 43 million visitors a year. Japan, which currently owns 4.5 million slot machines, one for every 28 people, has already begun granting 3 licenses for casinos resorts. In Colombia, lotteries and games move 1.5% of GDP. In Macau, the largest market in the world today, gaming raised GDP from US$ 7 billion in 2002 to US$ 45 billion in 2016.
Do you plan to have meetings with the Ministry of Economy to help regulate sports betting? Do you think it should be ready this year?
Yes. The idea is to request an audience with the Minister of Economy so that he can count on the OAB in this effort to build the rules for sports betting in the country, which should move forward as soon as possible. Note that sports betting in Brazil already moves more than US$1.1 billion per year in international sites that operate freely in the country, without any control and monitoring of bets, which endangers the integrity of the sport.
How do you analyze Lotex's lengthy granting process? You think it had flaws?
I did not follow Lotex's concession process closely, but the regulatory framework is confusing and this may have been one of the reasons for Lotex's lack of market interest.
Do you notice a clear position of this new government of Jair Bolsonaro related to gaming?
Brazil has just promulgated Law 13,756 / 18 which, among other issues, creates the sports betting modality in Brazil. The law was sanctioned by President Michel Temer in December last year, that is, after the election of President Jair Bolsonaro and it predicts that part of the proceeds from the collection of sports betting, both in the physical and in the virtual environment, will be destined to payment to the National Public Security Fund, which is a flag of President Bolsonaro. This is undoubtedly a first step towards the legalization of gambling and betting in the country.
In addition, Bolsonaro has repeatedly stated that Brazil has to adopt liberal principles, based on the defense of individual freedom against the intervention of state power. The use of these principles will lead to the legalization of the gaming market in the country, which is said to have never been voted in Congress. Moreover, one of its promises is precisely to prioritize growth and job creation. The intelligent and efficient regulation of the gaming industry in Brazil is a tool for this and the OAB is ready to collaborate without dogmas in the discussion about the regulation of the activity in Brazil, with responsibility, objectivity and intelligence.
Should Brazil seek advice from foreign companies and regulators to make good regulation of sports betting?
We certainly need to learn from the mistakes and correctness of regulation in other countries. It is fundamental to know deeply the best international practices so that Brazil can have its own, intelligent and efficient regulation.
You are a man with great relation with the international market ... how the world sees Brazil?
The gaming industry sees a lot of potential in Brazil, but, it has a certain skepticism since there has been talk for a long time in regulating the activity, something that has not yet occurred.
Source: Exclusive GMB