Gelfi began his participation in the panel expressing his agreement with the people who now participate in the preparation of the new sports betting law. “There are other stakeholders inside the Minister of Economy, and I see that as very positive because they are evolving the top league of economic model as well as legal and technical support to help on the project. This was not the case until a few months ago. Now, BNDES and the Secretaria Especial de Fazenda are two very respected technical teams that are part of this project that becomes part of the Ministry of Economy agenda, which I think is a positive piece of information into this whole process”, Andre explained.
The panel “Update on Brazil: Delays, decisions and a race for market share” (developed entirely in English) also included Arthur Silva (Head of Sports Operations at Sportsbet.io) and Neil Montgomery (Founding and Managing Partner Montgomery & Associados). The moderator, Christian Tirabassi (Senior Partner at Ficom Leisure), continued with questions to learn more about the opinion of the CEO of Suaposta:
Moderator - How would you describe the current situation of the sector where your company operates in Brazil?
Gelfi - The sector, as we see at this moment, is basically an offshore market -aside from what we have here in Brazil as Suaposta/Betsson (in the near future Betsson) and then we have the lotteries a lot of informal activity here in Brazil. What we are seeing is basically a substantial migration from offline to online into the existing business Suaposta operates in terms of horse racing, which is the single vertical we have fully licensed in Brazil. We have seen a lot of customers from the offline competition coming back into business. And it is not different at all to the global phenomenon. I mean, it is people from home looking into the alternatives they have, and horse racing has somehow managed to get along with the crisis.
How are you dealing business during the pandemic and what do you see in the future for the return of sporting events?
Although we are offering half the number of races we were offering before, here in Brazil, we managed to keep on track with our budget and with our plans for the year, which it is extremely positive news. So, the phenomenal is in there and I think that this is thanks to COVID, no more than that. At this moment, the offshore market is struggling with the sports and there is probably not a good migration into alternative such as horse racing happening in the market.
There will be still a few months after the COVID issue is sorted out and the release from the lockdown period that in Brazil is more of a quarantine with flexibility to go around on the streets. I think that once normal life is back, the market is likely to resume recovering its former shape and we will have sports coming up in the following months. But at the end of the day, this is something that we see happening in the medium term. On my view, it is totally unsustainable and inconceivable not to see football coming back in the second semester here in Brazil for obvious reasons. I think the market will remain looking to the details of how regulation will unfold and we’ll still have a few months before regulation is in place.
From your point of view, how do you see the development of the Brazilian market for your company?
I'm looking very much focused on what I in my opinion is it's easier to predict, which is basically the regulatory process of sports betting. There is no reason for us to disbelieve that, if there is something that they conclude on this studies that relates to change in the law, they wouldn't go and amend it and change the taxes from 3 to 1 or whichever rate they think it is more convenient for us to have a market that drives the best value on the concession process.
I would even consider that if they come to understand that there is something they can do for this project to be even more valuable in terms of regulating other verticals, I don't see why this couldn't happen. This is my personal opinion.
Ourselves, in Betsson, we are focusing one hundred percent of the regulatory process of sports betting. As I said before, amending the law is very likely based on the fact that they're evolving the whole Minister of Economy and this could be something sponsored by the government. That's my vision and, based on that, we are doing basically what can be done so far that is follow the process and improving our existing footprint.
Which do you think would be the next steps in terms of the regulatory process and what are the best place to succeed in terms of getting properly regulated?
When BNDES (National Bank of Development) gets involved, they go into the detail and they are now run by a very liberal approach. There you have a model that will check the boxes to maximize value. And this will probably impact the whole draft that we have seen so far. This is not going to be the same thing after the discussion. The points that are in there are going to change drastically after the study. They will amend this as well as eventually and come up with an amendment to the law. So, what we know is that it's going to be something different to maximize value onshore. Talking about the requirements to protect the local industry, from my perspective they will do whatever they can to maximize the value of the market onshore, and they will do what has to be done to inhibit the offshore activity.
Finally, give us your final message to close your participation in the panel
We are very optimistic about the unfold of the market despite the COVID-19 crisis. The topic is now part of the Minister of Economic agenda.
Source: GMB
