GMB: How did you feel when you were called by the Brazilian Congress to contribute with your knowledge and experience? Why did you accept to participate?
Mauro De Fabritiis: I greatly appreciate the invitation by the deputy Evandro Román to the public hearing promoted by the Sport Commission of the Brazilian House of Representatives. I am honoured to join and be a member of the panel of experts.
My decision to join the public hearing was positively influenced by the open-minded approach Brazil is following. Listening to international experiences, Brazil has the opportunity to take more informed and thoughtful decisions, avoiding mistakes in the regulation model that, as experiences in other territories show, have a critical impact in the development of the market.
What do you think that you and your company can contribute with at this stage?
I have been working, as Partner of MAG, for 15 years in the gambling industry supporting European (AAMS/ADM in Italy, ARJEL in France, DGOJ in Spain) and Latin-American (COLJUEGOS in Colombia) governments to define the regulatory framework and, on the other hand, supporting gambling operators to adapt their business model for a sustainable positioning in regulated environments.
Our experience continues with MDF PARTNERS, a consulting company I have recently founded with a team of historical MAG consultants, fully dedicated to the gambling industry, with the main goal to offer our experience to regulators and operators in international markets. Encouraging the equilibrium of the ecosystem (State, Regulators, Operators, Players) is the key to create a competitive regulated industry, fight against the illegal market, avoid money laundering and terrorist financing, safeguard customer protection and promote responsible gambling.
Brazil represents the most powerful country in Latin-America in terms of potential market and we would be proud to play a role in the regulation process. As I said, it’s really crucial for Brazil to look at international experiences before deciding its own way and in this sense, I will be pleased to contribute to create awareness for the deputies on risks and opportunities related to sport betting regulation in Brazil. For sure every model should be adapted to the cultural, political and economic environment of the country, but we have some lessons learned from international practices that Brazil should consider. The big advantage for Brazil is not to start from scratch.
Do you consider it is positive to hold this hearing? Do you think it can become a step forward or just one more of those that Brazil already had?
It is important to understand that introducing a new gaming regulation, especially in countries like Brazil that currently suffers an important unregulated market, is not an easy process and it usually takes several years to complete. The case of Brazil is very particular, as some years have passed discussing potential regulations but with no relevant steps until last year, where the coming into force of the Law 13756, allows the fixed odds betting regulation. The Ministry of Finance has two years’ time to develop the specific regulation and I am confident they will provide their best effort to reach the goal. Even if the law is not perfect for the effectiveness of the model, in particular in terms of gambling taxation, it´s a starting point. I recommend that Brazil should take this opportunity and try to improve the regulatory framework as a second step. Sport Betting GGR in Brazil could be around 2 billion dollars with relevant expected impact for the State and the industry.
Differently from the past, where Brazil tried unsuccessfully to regulate all gaming portfolio with a unique law, the idea to start with a specific segment could facilitate the task, also from a political perspective.
I think it's a concrete step towards the gambling regulation in Brazil. Sports betting will be the starting point but soon a second step is required to extend the regulation to other games.
From your perspective, with this audience and the new government ... do you see the legalization of the activity closer than ever in the country?
As I mentioned before, the Law 13756/18 approval is a fact. Regulation is the natural way and shows lot of opportunities for the country and gaming companies, as experienced countries like UK, Italy or Spain have shown. These countries now have dynamic, controlled and safe gaming markets where the state benefits in the form of recurrent and growing revenues, customers have access to a regulated and safe gaming offer and operators have a stable, controlled and sustainable market to operate.
On the other hand, countries with tighter regulations, reduced gaming offer and/or unsustainable taxation models like France or Portugal are showing the critical impact of the regulation. These countries, due to the lower attractivity of the legal offer versus the illegal market, show, even after several years of regulation, a high incidence of illegal operators.
Latin America regulation is still at his infancy, but moving quite quickly. Colombia, where we had the chance to support Coljuegos during 2015, has shown the correct path towards a safe and sustainable gaming market. Argentinahas started the regulation process for the Province and the City of Buenos Aires and is expected to kick off during 2019 or 2020. Peru´ is pushing for the law approval on sport betting and online.
Brazil could be a significant example and a benchmark for other Latin-America jurisdictions still in the regulation process.
Source: Exclusive GMB
