SÁB 14 DE DEZEMBRO DE 2019 - 16:22hs.
Regulation of bettings

Opening of gaming market in Brazil brings investment to the sport and the country

The expectation that the gaming industry will be regulated in Brazil opens important ways for collecting, investing in sports, tourism and other areas. In a complete article, Portal UOl interviewed sources and approaches on all sides of the issue that has not left the Brazilian headlines since the end of 2018, when President Michel Temer approved a project that regulates sports betting in Brazil.

There comes a change in Brazil with the regulation of sports betting. A new culture of hunches among Brazilians is born, very different from the lottery fever of the days of Zebrinha do Fantástico lottery. More than that, the expectation is that the sector dumps "rivers of money" in the country's football.

It should be noted that there is "a check for R$190 million (US$51m)" in sponsorship for clubs, which will be signed as soon as the industry comes into effect in practice. That is almost 30% higher than what Caixa invested in Brazilian teams last year, in the goodbye of the state-owned bank in the role of national football patrons.

Those who argue in favor of betting talk about predicting billion dollar taxes to the government and creating a new segment of activity that can benefit professionals of various activities. The Brazilian who already plays in foreign websites can also get along, knowing better who he deals with. Today, even with the sector without regulation, there are people in the country that lives on hunches.

But betting regulation also generates complex challenges for Brazil. The first one is to protect the integrity of the sport, especially against the threat of schemes of manipulation of results. It will also be necessary to establish criteria to remove companies without credibility. Finally, creating mechanisms that inhibit the gambling addiction among Brazilians will also be a mandatory mission.

Giant numbers

- US$ 1.15 billion - This is the estimated value that the Brazilian market moves annually, before regulation

- 500 - It is the approximate number of sites based abroad that already receive bets from Brazilian users. Some of them have pages in Portuguese

- US$ 270 million - It is the expectation of federal collection with taxation of bets, considering the current movement of this market in Brazil

- US$ 152 million - Only in the last World Cup, the international market moved around this amount

Against "default" from tax haven sites

Some Brazilians already accustomed to the online gambling routine went through troubles in 2017, when in a round of Serie A eight of the ten matches had victories of visiting teams. The unusual behavior almost broke some international betting houses, which failed to pay many of the winning users.

The famous incident in the community of national bettors is used as an example by Pedro Trengrouse, a professor at Getúlio Vargas Foundation, who presented a memorandum that advocated the regulation of sports betting, accepted by the rapporteur of the Provisional Measure on the subject (846), then Senator Flexa Ribeiro (PSDB / PA).

"The regulations also serve to protect the people's economy, because most of these companies are based in tax havens, such as Malta, Gibraltar, Curaçao or Costa Rica, so Brazilian gamblers are unprotected. If these companies do not pay for some reason, they have no one to turn to," commented Trengrouse.

In the regulatory process, one of the government's challenges will be to attract companies with clear operations and to inhibit the performance of less structured sites in the country. Examples of European nations suggest measures such as blocking payment transactions, blocking websites and banning advertising that promote unlicensed operators.

"These companies are in a comfort zone. Today they operate freely in Brazil, they have TV advertising, receive bets from Brazilians and they do not pay any taxes," added the academic responsible for studies on the area for Caixa Economica Federal and the Ministry of Sports.

Brazilian football awaits for loads of money

For international sports marketing analysts, betting bookmakers as a market player in Brazil can revolutionize local football. Estimates indicate more than US$ 1.6 billion in revenues, with the projection of a mature market.

The expectation is that the Brazilian market will follow international trends in football as well. In the English Premier League, for example, half of the teams are sponsored by betting sites - but the investment is only 17% of the total. In the second division 70% of the teams have companies in the segment as partners.

The giants of English football still do not show bookmakers on their shirts. The biggest contract of the sector belongs to West Ham, London team, with 10 million pounds annually with Betway.

"In my point of view, it's probably going to happen here in Brazil as well," said Amir Somoggi, "but it's easier with clubs such as Cruzeiro, Atlético-MG or Chapecoense, specialist in marketing and sports management, rather than giant Flamengo, for example. The nine Premier League teams sponsored by companies in the segment received in the 2017-2018 season more than US$59 million. In the Second Division the total value of sponsorship of betting companies was approximately US$12.5 million. These figures are more than double what Caixa has disbursed for all divisions of Brazilian football in 2018.”

"What bookmakers are looking for are two things: a lot of visibility and relation with this 'heavy user' customer, the guy who will consume their product," said Somoggi, a partner at Sports Value Marketing Sports.

"It is reasonable to conclude that there is a check of about US$51 million in sponsorship and marketing partnerships ready to be delivered to Brazilian football. Of course, the exact size of the check will depend on how this activity will be regulated by the government. Primarily there will be free competition, without restrictions on the number of companies," says Luiz Felipe Maia, certified lawyer in regulation of casinos and bets by the University of Nevada.

Meanwhile, the Brazilian football club Fortaleza has inaugurated the era of shirts sponsored by online bookmakers, the first agreement since the government promulgated the law that allows the operation of this type of company in the country.

The club from Ceará state got a shirt sponsorship with NetBet, a Malta-based website, which gained notoriety in England in 2013 after paying US$4 million to a player who bet US$16. The deal, which has no figures released, is valid for the current 2019 season.

"As with all our partnerships, the contract goes through the legal sector for validation, then it is sent to the board for approval. We had a very great acceptance, at no moment was there a contrary current," said a Fortaleza official.

"Brazilian football was one of the last to live without this market. We see companies out there sponsoring even the Real Madrid shirt. The trend is for this market to open up in Brazil. We are just at the beginning," says Victor Simpson, Fortaleza's commercial manager.

Technology against manipulation of results

One of the main challenges of a country that opens for sports betting is the monitoring of suspicious activity. Those who argue in favor of regulation say that a segment with clear rules helps in the fight against manipulations. But how to inhibit the bad faith of schemes of manipulation of results? The answer is technology.

"We work with algorithms and we have at hand all the history of a match, all the information regarding the game in question. For example, Corinthians against Flamengo, we have the whole 'big data' on past results of the confrontation and thus we arrive at an expectation of probabilities. If the stakes for that game deviate from that expectation, if what happens in the field accompanies this diversion, our specialists are in a position to track this unusual behavior,” explained Christopher Dougan of the Genius Sports Group, a company that takes care of the integrity of the Premier League in UK.

"There are many options, but Brazil will have to decide whether it will have a centralized control system, where a single agency is responsible for monitoring, or instead allow operators or groups of operators to monitor their own standards," said James Kilsby, an executive at Gambling Compliance, an independent body that regulates the international online gaming industry.

Source: GMB / UOL