Fixed-odds bets are those in which the bettor knows what value he will receive if he wins. Some examples are those of websites (not regulated in Brazil) that offer betting on sports games. "This lottery will be operated in a competitive environment, we are stipulating the regulation to start the operation in a competitive regime", Ranciaro Neto says.
Passed in December 2018, Law 13.756 deals with betting regulations. In 2019, the Ministry of Economy held two public consultations on the topic and almost three thousand suggestions were made, showing strong interest on the subject. Currently the text is analyzed by the legal team of the ministry.
Ranciaro points out that the projection of R$ 5 billion (US$ 1.2b) refers to all the movement involving bets. “Of that amount, companies will return about 90% to the consumer. So, the effective taxation is going to be about 10%. Let's take the example of R$ 5 billion (US$ 1.2b), the annual tax base will be R$ 500 million (US$ 120m).” According to the new rule, adding all social transfers that must be made, the taxation should be equivalent to 35% of the remaining 10%.
“It is not for the collection, this modality does not collect as much. Our objective is, first of all, to strengthen and allow consumer protection, to strengthen the popular economy, to guarantee a good business environment, a regulated environment, which is not predatory and to guarantee the integrity of the sport,” emphasizes Adhemar.
The contribution will place Brazil at an average level of collection. According to the coordinator, some of the lowest taxes are in Italy, England and Denmark, with 20%, and one of the highest in Portugal, with 65%. Brazil would be at the level of Greece. “Greece is an average betting market, it is not very attractive, but it is a viable market”, he exemplifies.
According to the Ministry of Economy, on average in the online modality, 90% of gross revenue will be converted into prizes, leaving the company with 10%. In the physical environment, 80% of gross revenue is converted into prizes, leaving the company with 20%.
How does it work today?
Today the legalized bets are the lotteries administered by Caixa Econômica Federal. As with Mega Sena, Quina, among other numerical prediction games, sports betting bets like Loteca and Lotogol and the federal lottery itself are all operated exclusively by Caixa.
"Gambling, which is not part of Caixa's lotteries, is prohibited. Commanding them can be classified as a criminal offense. Although unregulated, fixed odds betting takes place in Brazil, mainly online. Sites place bets and, as they are hosted in other countries, in practice they do not violate Brazilian law.
Sites will be able to operate in Brazil
At least 11 Brazilian Serie A teams have already closed some type of agreement with the betting sector. They are São Paulo, Flamengo, Fluminense, Atlético-MG, Bahia, Botafogo, Corinthians, Cruzeiro, Fortaleza, Santos and Vasco. The exact number of betting platforms operating in Brazil and hosted abroad is not known by the Ministry of Economy.
Adhemar Ranciaro says that when the regulation is published, the sites will be able to seek authorization to operate in the country. “As of the authorization, there is a deadline that we are placing in the decree for the start of the operation. It will be more or less six months,” he says.
Ceará, Pernambuco, Minas Gerais and Rio de Janeiro are states that already offer fixed-odds sports betting, through an injunction granted by the courts. "The Union is the one with the competence in relation to consortia and sweepstakes", says the coordinator about the situation.
Regulation aims to facilitate betting and ensure security for bettors
After going through the legal analysis phase, the expectation is that the decree will be signed by President Jair Bolsonaro by the end of the first quarter of this year. The values that should serve as reserves for companies that want to operate sports betting in the country are still being studied.
The draft provides for a reserve value of R$ 6 million (US$ 1.44m). This money must be kept at the government's disposal by the bookmaker, operator, legal entity or consortium as guarantee for the payment of prizes.
“The gambler is the consumer of a product. When this product is illegal, there is no consumer right for him, because there is no guarantee that this money will be paid,” says the coordinator. According to the Ministry of Economy, the first years of validity of the new rule may generate 5,000 direct and indirect jobs.
Casinos and horse racing
Regarding the possible legalization of casinos, Adhemar Ranciaro points out that Congress has the final say. “It is up to Congress. Congress is the one who will define and place its decision, it is sovereign to decide on that.”
Jockeys clubs can explore lotteries, as long as they are linked to horse racing results. These bets are known as sweepstakes. A second decree should simplify these operations. Bets are valid for real, non-virtual races and present and future races.
“Here in the ministry we work trying to complete this [lottery] market, which already had a legal provision; we are trying to facilitate it, make it more viable”, says Ranciaro.
Result manipulation
The intention with the new rule is also to try to avoid the manipulation of results and money laundering. “The regulation is precisely for this, so that one can minimize these results that occur in illegality, such as complaints of sports manipulation, of people not paying. We are developing a series of mechanisms together with international certifications,” emphasizes the coordinator.
Among the mechanisms are the use of certification of bets, equipment, software, usage programs, to avoid possible fraud. In addition to the role of the supervisory body. Football should be the most used modality in Brazil, according to what the Agência Brasil showed. The sport has already faced cases of manipulation of results such as the "Mafia of the Whistle".
Source: GMB / Gazeta do Povo
