JUE 30 DE MAYO DE 2024 - 18:50hs.
Caio de Souza Loureiro, lawyer

Inertia in sports betting regulations in Brazil

The lack of regulation of sports betting in Brazil is the subject of an article by Caio de Souza Loureiro, partner at TozziniFreire Advogados, for the newspaper Valor. In the text, Loureiro highlights the omission of the government of Jair Bolsonaro, who was held hostage by the evangelical bench. For him, 'as there is an express legal order for the Executive Branch to regulate the legal provision, with a specific deadline for this, the situation typified as a crime of responsibility is clear.'

Much has been said about the expiry of the deadline for regulating sports betting (fixed-quota betting), as determined by Law No. 13,756/2018. Characterized by the legislature as a public service, fixed-quota betting was created by Article 29 of that law, which, in paragraph 3, establishes the period of two years, extendable by two more, for its regulation.

This deadline ended on December 13, despite information that the decree responsible for regulation would already be ready, waiting only for the signature by the president of the previous Republic.

The reasons for this omission - now, already settled, with a view to the end of the mandate without the decree being signed - have already been sufficiently discussed, ranging from a request from the evangelical bench to the generic inertia that fell in the presidency between the end of the election and the end of the term. The fact is that the non-compliance with the legal deadline resulted in much greater problems for the former representative than the loss of revenue and the incentive to informality - by itself, issues already equally relevant.

There is, at first, the subjection of the President of the Republic to the practice of crime of responsibility, according to Law No. 1.079/1950, which, in its Article 9, states that there is a crime of responsibility when the President of the Republic "omits or intentionally delays the publication of the laws and resolutions of the Legislative Power or the acts of the Executive Branch."

As there is an express legal order for the Executive Branch to regulate the legal provision, with a specific deadline to do so, the situation typified as a crime of responsibility is clear. Moreover, it is clear the absence of plausible justification for the normative omission, especially when four years have elapsed and, all the worse, when news of the existence of the normative act ready and finished, leaving only its signature by the president.

It is worth saying that the ministers of state involved - the economy at the time, especially - also respond jointly with the president for the crime of responsibility. This is made clear in the wording of Article 13 of Law No. 1,079/1950, which holds ministers of state accountable for the acts that fall with them concomitantly with the Presidency. Were it not for thematic competence, the fixed quota betting law itself directly assigns the Ministry of Economy responsibility for regulation.

In addition to the crime of liability, the authorities involved in the regulatory omission may still be subject to administrative misconduct. As the lack of regulation - by default - results in the loss of revenue, there is a clear loss of revenue, with prejudice to the money.

In these terms, it is quite feasible to frame the presidential - and ministerial - inertia in Article 10 of the Administrative Improbity Act. In fact, the device predicates to be an act of improbity "any willful act or omission" that "causes damage to the treasury". Here, it is worth saying that the list of situations referred to in the article is not taxing, taking into account the use of "notably" at the end of the caput. So much so that, even with the advent of Law No. 14,230/2021, which introduced changes in the Law of Improbity, the exemplificative character of the article 10 list was not changed, the same not occurring with Article 11, which now has exhaustive hypotheses.

In addition to possible accountability, the omission in regulation frustrates the provision of a public service. After all, Law No. 13,756/2018 itself attributed to fixed-quota betting the condition of public service, which demonstrates the special interest in its provision. Although debatable, it is possible to understand the legislative option, based on the relevance of regulating this service, in order to establish mechanisms for protection of the bettor, avoiding the risks of informality. In addition, episodes of sports fraud are recurrent, through the prior arrangement of results and, finally, bets placed in a deregulated manner could serve as an artisan for shady purposes, nodded for money laundering.

In a scenario of scarcity and the need for fiscal adjustments, it is difficult to understand the previous government's omission to regulate a source of resources that is already provided for by law. It is worth remembering that the need to address public accounts was a recurring speech by the Ministry of Economy over the four years in office. In the current situation, it is not even believable to assume illegality or inadequacy of fixed quota bets, behold, that has legal support and, moreover, were considered a public service. The issue of the decree, if it had been made, would be a last act by which the president could at least boast about the benefits brought with regulation.

So, however, he didn't. And the issue remains pending, thanks to a disgraceful crime of inertia (to paraphrase Eça de Queiroz). After all, he created for the former President of the Republic and his Minister of Economy the risk of being subject to the sanctions of the Law of Crimes of Responsibility and the Law of Administrative Improbity.

In the new government, the expectation is that the omission will finally be remedied, if only because it is known that the new administration has just edited a series of normative measures aimed precisely at improving public spending. It is reasonable to assume that this attention is also focused on raising revenue, something to which the regulation of sports betting can significantly contribute. 

Caio de Souza Loureiro
Partner in the area of Administrative Law and Government Projects of TozziniFreire Advogados

Source: Valor