VIE 10 DE ABRIL DE 2020 - 16:06hs.
Opinion - Caio De Souza Loureiro, lawyer at Betsson

Regulation to promote investments and increase Brazilian revenue

Regulating sports betting is a unique opportunity to meet the repeated desire for resources to achieve public policies, while promoting investments in the country and also combating informality, the practice of illegal activities and money laundering. This is the opinion of the lawyer specialized in administrative law and hired by Betsson, Caio de Souza Loureiro, in this exclusive column for GMB.

Recently, the Ministry of Economy ended yet another public consultation process related to the proposal to regulate sports betting in the country. With the fixed-odds betting modality in the form of Law No. 13,756 / 2018, sports betting represents a unique opportunity to promote investments and increase public revenue.

Art. 30 of Law No. 13,756 / 2018 provides, in this sense, percentages of distribution of the collection with the operation of these bets, benefiting, among others, social security, education, public security, priority areas of any public policy and which demand resources constantly.

Regulating sports betting allows these percentages to be effectively met, being certain that the current situation prevents the appropriation by the State of the high volume of resources that is already handled on several betting websites. These, due to the lack of regulation, operate in other jurisdictions and do not submit to any type of inspection, without providing any public revenue.

Certainly, many of these operators would see no problem in adhering to regulation, as this is already a reality in many countries. Some of them are large companies, many of which are publicly traded and are subject to governance rules. For them, regulation is not exclusively an obstacle, but rather a stimulus for regular action.

Regulating sports betting is, therefore, a unique opportunity to meet the repeated desire for resources for the achievement of public policies, while promoting investments in the country and, still, combating informality, full plate for the practice even more serious offenses such as money laundering.

In this sense, the effort made by SECAP, which promoted two public consultations on the subject, is commendable. However, it is necessary for the Ministry of Economy to define, finally, which model will be implemented, remembering that the authorization - until then, envisaged as the instrument for the operation - gave way to the concession, in the last regulation proposal. This change, by itself, causes insecurity to the market, which already had an expectation for the adoption of the authorization mode, according to the first public consultation process.

More than that, the change represents yet another delay in defining the model, which can be crucial in the investment decision of large operators. It is necessary to remember, after all, that other countries, including the United States and others in Latin America, are currently working on their regulation and, in Brazil, there is a situation that the one who prepares better and faster, will have an advantage in the decision of investors.

It is expected, now, that the adoption of the concession model will bring additional challenges to the regulation, mainly because the concessionary regime is more complex and more regulated than the authorization one. Therefore, it will be essential to foresee the way in which the concession contracts will deal with the specifics of the sports betting operation, many of which are incompatible with elements of the general concession regime. This task requires time and caution, since insufficient regulation or that does not take into account the characteristics of the sports betting operation, may have an adverse effect, alienating potential investors or rendering future concession contracts unfeasible.

The concession contracts also demand previous feasibility studies - economic, technical and legal - whose execution goes beyond the scope of SECAP and requires support from external consultants, possibly from BNDES or other institutions with experience in this task. It is, therefore, a work of breath and that will demand additional time.

What is important, therefore, is that the Ministry of Economy be able to reconcile the expected speed with the necessary caution to regulate the concession, if this alternative for the operation is insisted upon. It is necessary to be aware of the importance of the regulation of sports betting, especially in adverse times, when public revenues will be even more necessary to supply the resources used in countercyclical measures.

Caio De Souza Loureiro
Lawyer specialized in administrative law at Betsson

Source: Exclusive Games Magazine Brasil