REGULATION OF PRIVATE GAMING - WHAT, HOW AND WHEN ???
So much time talking about regulation of the gaming sector in Brazil that we have to be skeptical by default. However, if in the future a regulation that normalizes the activity of private gambling in Brazil has to be done, it has to be well done, because all this time it has made it possible to know what has been developed in other countries and what have been the formats that have succeeded and those who have failed.
In recent weeks the debate has been accentuated and initiatives appear, which do not increase expectations due to novelty. And in the last two years we have known dozens of movements, before projects, debates, drafts approved in committee; all have ended up in a dead way or parked syndemy.
Therefore it has to be developed a regulation that meets the demand to bring to the regulated market the huge volume of illicit activity existing and over which the administration don’t seem to have been successful in controlling and eradicating.
A variety of product and complete content must be offered in all the channels, in person and digital, rationalizing its implementation, because not by quantity a better response is achieved. The offer must be adjusted to the needs and objectives that should not be other than the private game is based on a transparent regulation and process, demanding compliance for operator defense, administration, protection and consumer guarantee.
In addition to the complete and balanced offer, there should be a requirement in terms of transparency, objectivity of the administration and requirements, applying a taxation also adjusted to allow a sustainable activity that absorbs the largest volume of the gaming demand in the country, now illegal and that has to be moved to the regulated market.
This sounds like a proclamation or discourse of intentions; and surely any reader will say that they are too obvious conditions; they are not so much in practice, because the administrations, (regulators), in their desire to punish the regulation of an activity that they know stigmatized, end up breaking all or many of the premises that have been said previously. And do not ask me why, because I am sure that many of the advisors or consultants have recommended these or similar minimum conditions so that a gaming norm fulfills its objectives.
Another aspect to highlight when expressing the reasons why gaming has to be regulated, are those of economic growth or job creation, almost always exaggerated, which tends to create expectations that do not conform to what the activity can give. This argument is something that does not need to be used because, in a market like the Brazilian one, the main objective should be the eradication of crime and the transfer to a regulated and controlled environment of an activity that generates billions of dollars and that exists without control for any of the ones that participate: administration, finance and consumers.
The private gaming already exists in Brazil and is being carried out in an uncontrolled way in all aspects, despite a prohibition that has not prevented it from being carried out for dozens of years, so at some point the responsible authorities will realize to follow the debate of years; yes or no, and how. It does not lead anywhere but to consolidate those that carry out the illicit gambling activity with total impunity.
Gaming should be treated as a normal activity, which society consumes in a natural way, taking into account all precautions and aspects that have to be controlled, supervised and enabling a rationally regulated activity so that each one meets the requirements and carries out a function that must bring benefits to all those involved, something that does not happen now.
It is not about approving a minimum number of gambling casinos or a jurisdictional distribution by departments or states; they should be installed where commercially advisable and let the private initiative determine its characteristics, size and content of the offer. The same happens with the bingo halls, their rational installation must prevail over a more or less proportional distribution; again the characteristics of the offer and contents, location and others must be in accordance with the interests of the operators. In the same way with the gaming rooms if they are authorized; they must be subject to the business criteria of the operating companies subject to the legislation that is established. Requiring constraints that do not allow the sustainability of businesses have the opposite effect of regulation.
And with regard to digital channels, the online betting sector, a sustainable regulation must be established consisting of a complete and competitive offer and content ... because in Brazil there is already a lot of action in digital channels with an offshore offer without guarantees or benefits more than for illicit ones; Taking measures to prevent the illicit offer from continuing once the activity is regulated.
And, finally, all this with a tax rate on the activity that is rational, which must be in a percentage range - depending on gaming segment - with a rate between 10> 15%; based on gross gaming revenue or GGR. A rate that allows absorbing the vast majority of demand, that companies can carry out a sustainable business, which is the greatest guarantee for the administration to collect the highest volume of taxes. A higher rate is no guarantee of higher revenue, it depletes the business and upsets the expectation of tax revenues.
If this premises are applied, then it will not be too wrong, as long as the regulations are serious and well defined, the agency responsible for regulation and compliance very serious, transparent, and refractory to any external influence that does not conform to the standard.
Gaming should have no doubt of its transparency in the entire value chain, regulator, supervisor, operator and player; It is not about applying only a responsible gambling policy, but being responsible for applying a gaming policy.
Eduardo Morales Hermo
Online & retail Betting & Gambling-Omnichannel-Biz Development-Specialized in U.S. - LatAm- UE + new emerging markets
