GMB - Who does your book target? What is the purpose and importance of the publication on this topic that has been under debate in the Chamber? What themes do you cover in your work?
Jaques Reolon - The book was written for workers, professionals and entrepreneurs. Everyone should know the gaming market and prepare for the jobs and business opportunities that will come. I initially wrote over 250 pages. Then I summarized, replaced the technical terms, and turned them into clear and objective texts.
The aim is to show that gambling is an economic activity to be regulated and enforced by the state, just enough to prevent damage to the community and to maximize its financial potential, translated into job creation and income generation.
In the book, I analyze the main points of the bills, the House and Senate, explaining and suggesting measures that enable the economic exploitation of activities. Sometimes the legislator wants to do public policy with economic activity. This may even be possible, but it may not affect the expected profitability of the business as the investor will always analyze the opportunity cost. Finally, I approach all the themes that are in the projects, always trying to highlight the job and business opportunities and the precautions that the legislator must take so as not to make the activity unfeasible.
Many say the legalization of gaming comes this year. Do you believe that the bills on the subject have the strength to be approved by 2020? What is your opinion about the regulation of the activity?
I understand that legalization is possible this year. And the performance of the mayor, Rodrigo Maia, who has been a skilled articulator and a statesman, will be fundamental. Obviously, this does not mean to belittle the very important work of several parliamentarians at the head of the issue and also of the Executive.
Regulation is necessary because gambling is considered a misdemeanor, although the Constitution allows the free exercise of any economic activity. The regulation should focus on three key objectives: i) make the activity lawful, ii) establish a legal framework that gives investors legal certainty and iii) mitigate or eliminate events related to unregulated gambling, such as ludopathy, money laundering, criminality and others.
Some advocate just opening casinos and not legalizing all types of games. What do you think about this? Is it really relevant for the country to grow financially or would it be ideal to release all games?
This question is not so simple. There are now established groups exploring gambling that could be considered as another activity within a casino. For example, I could allow bingo only inside casinos. When I exclude casino gambling, I create widespread competition that affects the financial sustainability of the business and hinders state enforcement activity.
When I allow the exploration of games in a single venture, I increase its economic efficiency. This has numerous advantages in terms of projects and can result in large and eye-catching ventures that attract even many foreigners. Have you ever imagined a big casino resort in the Amazon, or in the Pantanal or Jalapão, for example?
With the release to set up casinos in the country, which cities would you consider most relevant for this type of investment?
Lots. There are several who are already interested in attracting international players. I could cite names of cities that already have a large population or tourist potential, which is important in setting up these ventures, but there are remote locations that could hold casinos and develop their regions, but this must be a decision of the private investor and never an imposition of the Brazilian state. By proximity to some investors, including international ones, I would say that Santa Catarina, Rio de Janeiro, Sao Paulo, Brasilia, Bahia, the Amazon region, the Pantanal region and others, not necessarily in this order, are of interest for investments.
The sports betting law that is to be announced by SECAP has received criticism from midsize and small operators who find the business very difficult. What opinion do you have about this? Do you think it will be approved like this or will it be changed?
There could be a larger opening. For example, it would be possible to release operator accreditation at three levels: national, state and municipal, with differentiated guarantee values that would allow for greater market share. In theory, there could be the participation of large, medium and small players in this huge and sliced Brazilian market. Obviously, a municipality may be less expressive in terms of betting, but large operators will be more restricted to online games and do not have the same capillarity as small and medium operators who will trade “on the street”. There are other solutions that could be implemented, in business terms. The important thing is to know SECAP's claim.
What is your position regarding gaming advertising after they are legalized and regulated?
I understand that advertising can be released, but monitored to see if a correlation can be established between its use and the increase in cases of problem gambling. And even if there is such a correlation, it does not necessarily imply restriction on advertising. There are preventive mechanisms such as player participation bans, government campaigns, incentive restrictions for certain individuals, resource allocations to prevent problem gambling and others. I think the proposals in parliament are very effective in that regard.
Given your knowledge of this segmentation, how do you think gaming exploration can benefit Brazil?
In direct and indirect investments. Obviously large enterprises will require infrastructure at an early stage. There will be needs for highways, airports, health, energy, staff training and many others. As direct investments, engineering works and services are the most evident and a lot of skilled labor. Impact and direct results on the Brazilian economy.
Just try to imagine a great venture without highway, airport, hospital, security and etc. Of course, here we have an initial expense of the Brazilian state, depending on the modeling. If the government chooses to bid for the construction of the highway, the expense is yours, but if you choose the concession, preceded by public works, you transfer the business risk and the expense to the private individual.
Simple to imagine, too, the plentiful creation of jobs and the significant increase in income. Brazil only has to gain by releasing the gaming sector.
Of all the projects in the Chambers, which do you see most likely to pass? Why?
Those that are broader and those that pass the stages of the legislative process. I think I could cite as an example the initiative of Senator Ciro Nogueira, the bill of the Senate No. 186/2014. In this project, I just disagree with the complex participation of federative entities in accreditation and supervision. There are cases of concurrent oversight. I believe that state participation should be minimal and preferably represented by a specific body. For example, there is the UK Gambling Commission (UKGC) as the regulator of all UK online casinos, betting shops, arcades, slot machines and lotteries. Too many organs mean too much subjectivity and too many problems of all kinds.
In recent months, representatives of the evangelical bench have gone publicly to express their opposition on gaming. Do they seek to pressure Bolsonaro? How do you see the president's position on casino legalization? What about society?
The opinions of opposing groups must be respected and considered, especially the religious ones, as they are very important in the formation of individuals and of this country. In the political field, these groups obviously influence President Bolsonaro's decisions, as do other social segments. This is from politics. The legalization of gaming, however, I understand to be a matter of the economic and public security area and not of the Presidency, if one can say that. Here the avant-garde must be ministerial. We are talking about jobs, income, tourism promotion, crime fighting and others, as inducers of human dignity, one of the foundations of the Republic. The restrictions of these opposing groups, as an example of possible facilitation of money laundering or addiction (ludopathy), should be considered by parliamentarians and the executive in the bills. By the way, those in the House or Senate are already very careful and have solutions to these situations. I explain in detail in the book.
Society wants to improve the quality of life through more jobs and income, which necessarily requires legalization.
In your book you mention state lotteries. How do you see them at a time when the fight with Caixa's monopoly doesn't stop? Do you have an opinion about LOTEX's business?
I understand that states that already had lotteries, when the Decree-Law No. 204 of February 27, 1967, can exploit the public lottery service today. This decree establishes the exclusivity of the Union in the operation of the service, but it excepted the state lotteries existing at the time. Just read your arts. 32 and 33. And, as I understand it, it was received by the Constitution.
Therefore, all states that already had lotteries will be able to continue operating them. And the states that did not have, by imperative of the federative principle, I understand that they can. How to justify, in constitutional terms, that some are allowed and others not? On this matter, it is noteworthy that the recent decision of the STJ, regarding the Ceará lottery does not affect the discussion, although much celebrated, because it was a mere procedural issue, without decision on the merits. Obviously, there are other legal effects that cannot be discussed here.
Source: Exclusive Games Magazne Brasil
