In the course of Provisional Measure No. 846/2018, edited by President Michel Temer, parliamentarians inserted and approved the unprecedented "lottery modality, in the form of an exclusive public service of the Union, called fixed-odd bettin" in Brazil.
As a result, Law No. 13,756/2018 formalized the creation of the modality that "consists of a betting system related to real sports-themed events, in which it is defined, at the time of placing the bet, how much the bet can win in the event of a hit of the prognosis" and determined that the then Ministry of Finance (current Ministry of Economy) regulate the matter within four years.
In simpler words and currently stamped in the sponsorship format on uniforms of almost all Brazilian football clubs, around sports fields and courts, in MMA rings, in the square meters of race car fairing, in online directed marketing, during the break of your favorite sport on open channel or by subscription, Law nº 13.759/2018 legalized sports betting in national territory.
This gave rise to the continuity of a process (after all, sports betting certainly already existed in Brazil before that, in physical and digital environments) full of quasi-normative emotions, regulatory risks and proportional financial-institutional return for those who face them.
In the meantime, the market experienced the first rays of light to bring moral and commercial transparency to its operations.
In the judiciary, the Federal Supreme Court authorized the creation of public lottery services in all Brazilian states based on allegations of non-compliance with a fundamental precept (ADPFs 492 and 493), having decided that the articles of Decree-Law No. 204/1967 guarantee the monopoly on the exploitation of lotteries by the Union had not been accepted by the 1988 Constitution.
In parallel, the Federal Executive experimented balloons of regulation through draft decrees that did not take effect; later, it qualified the modality in the Presidency of the Republic's Investment Partnership Program (PPI), as an alternative for building the way to privatize the modality, to be facilitated by the National Bank for Social Development (BNDES), pursuant to Decree No. 10.467/ 2020.
Now, it is said (or rather, it is heard) that the modeling process via PPI and BNDES would have been abandoned and that regulation would emerge from the government itself. The opposite is also heard. It is a matter of time to see what the truth is.
In particular, from a normative and regulatory perspective, the market has won a partial victory, by having the tax arrangement operationalized based on the sum of all bets made (turnover) finally changed and replaced to consider the tax incidence based on profit gross gaming revenue (GGR), as a result of Provisional Measure nº 1.034/2021 and the consequent Law nº 14.183/2021.
The final election year of 2022 will receive the following scenario:
1) the federal government lost three years of revenue;
2) gamblers are uninformed and eager for entertainment;
3) the control bodies see a photograph in very low resolution of the market;
4) there are still no rules about advertising or marketing;
5) there are still no rules on public health and responsible gaming;
6) there are still no rules for providing information about bettors to the Council for the Control of Financial Activities (Coaf), for purposes of preventing money laundering and terrorist financing;
7) the states outline the creation of their own lotteries foreseeing the exploitation of sports betting in their territories uncertain of the limits of their material competences to modulate the service, outside the federal government;
8) part of the operators is eagerly awaiting (and acting) for this outcome to offer products that adhere to a more mature regulatory framework; and
9) hundreds of other operators, in Brazil or abroad, offer the modality (ix.a) mirroring the good practices of foreign regulators or (ix.b) simply ignoring any sign that there would be rules for the offer of sports betting.
The market trusts the capacity of those who lead this process in the federal government. There is little for the State to do what has to be done: fill the gaps in the regulatory framework for fixed-odd betting, as determined by law and demanded by the sports betting ecosystem, including operators, affiliates, bettors, means of payment, sports leagues, public health representatives and a multitude of agents interested in the fairness of this process.
Only then will we be able to announce regulatory updates on sports betting in Brazil.
Sérgio Garcia Alves
Master in Law & Technology from the University of California, Berkeley. Master in Regulation from the University of Brasília. Partner at Abdala Advogados. President of the Brazilian Bar Association's Gaming Law Commission – Federal District Section (OAB/DF).
Source: domtotal
