“I believe this (absence of quarantine) is an incentive to bring this companies to legality. When the market is regulated, these guys will have to operate legally in Brazil. If they don’t, they are punishable,” says Alexandre Manoel Angelo da Silva, national secretary for Public Policy Assessment, Planning, Energy and Lottery at the Ministry of Economy.
Market debate
Pedro Trengrouse, vice-president of the Special Commission on Sports, Lottery and Entertainment Law of the Federal Council of the Brazilian Bar, has a different view.
The lawyer recalls the legislation of the Netherlands. There, any site offering Dutch bets, advertised in the country, using unlicensed local extension and ways of payment, has to wait two years before it can operate legally in the country.
"The concept of quarantine is important for prioritizing licenses to trusted, law-abiding operators, not allowing illegal operators to benefit from building a customer base by offering illegal bets," he argues.
“Article 50 of Decree Law 3.688 / 41 establishes a prison sentence of three months to one year and a fine of R$ 2,000 (US$ 485) to R$ 200,000 (US$ 48,400) for those who participate in sports betting, even if through the internet or any other communication media, as operator or bettor. So today, both sites and gamblers are doing criminal misdemeanor and cannot be rewarded for it,” he adds.
Lawyer Luiz Felipe Maia, a specialist in gaming regulation at the University of Las Vegas, is opposed to quarantine.
“Companies will be able to serve their customers better, use local payment methods and sponsor teams. If quarantined, companies would have to spend six months without earning money and would have to pay tax in order to return to business. Today these companies make money without paying tax,” he comments.
For him, however, the draft decree is dubious on the subject. He cites Article 30, which states that "any form of advertising or disclosure of fixed-odd lottery betting by any person, natural or legal, except those authorized by the operator, is prohibited."
“There is a discussion because the draft decree says that the beginning of market activity will be at least six months after the presidential sanction. What we think from the conversation is that the advertising ban will only take effect at the beginning of the market. The way it is written implies that the ban is immediate,” he says. Sought, the government said there will be adjustment in the text of the decree to make it clear.
Law Schedule
The draft decree goes through a two-week public consultation period. The idea of the government is to initiate the processing of the law by several federal authorities so that it receives signature of President Jair Bolsonaro by the end of the year.
As local media giant GLOBO anticipated, once regulated, the market will undergo an adjustment period of six months. It is time for operators already operating in Brazil to fulfill a series of requirements to comply with the law.
“Foreign companies will have to prove that they are licensed in the country in which they operate. If there is no such proof, they will not have authorization in Brazil,” says Silva. Among the duties of Brazilian law is the payment of an authorization fee of R$ 3 million (US$ 726,000) in a single installment for a license with nine years of validity.
Each month, the operators of the sector will also have to pay a value, according to the chosen exploration regime. For those who work exclusively in the physical environment, the rate is R$ 20,000 (US$ 4,850). Firms operating only online will have to pay R$ 30,000 (US$ 7,250) per month. Those who explore both modes will pay R$ 45,000 (U$ 10,900) per month.
Companies will also have to present a financial reserve of at least R$ 6 million (US$ 1.45m). This amount will serve as a guarantee for the payment of prizes to gamblers, even in cases where the operator breaks. That is, even if the prize pool is above the amount raised with the bets.
Source: GMB / O Globo
