DOM 21 DE ABRIL DE 2024 - 05:43hs.
Opinion - Amilton Noble, director of Hebara

If governors do not react, the sports betting bill will be a mortal blow to state lotteries

The inclusion of article 35-G in Bill 2626, which regulates sports betting in Brazil, could prevent interested parties from applying for licenses in more than one State. With the restriction, those who have not yet launched their local lotteries will be harmed and the big players will be prevented from seeking the most attractive markets. “Each operator will have to make a ‘Sophie’s choice’ to define their strategies,” says Amilton Noble, director of Hebara, in an exclusive article for GMB.

The greatest violence against State lotteries since the infamous Decree-Law 204/67 was hatched within the National Congress.

The inclusion “at 48 minutes of the second half” of the second paragraph in Article 35-G in Bill 3,626 is a mortal blow to state lotteries, as it removes from governors the right and prerogative to exercise the choice of the best options in relation to operators lotteries by limiting it to just one State per operator or economic group.

In other words, the National Congress is about to decide that states with smaller populations, lower GDP, or those that have not yet taken steps to launch their lotteries be limited to picking up the 'leftovers' from those who failed to qualify in larger states or from those states that took the lead in their bidding or accreditation processes.

This is an outsized violence only compared to decree 204/67, issued at the height of the authoritarian regime that lasted for decades in Brazil and which restricted almost all States in relation to their lotteries for many, many years.

This is an immense violence only comparable to Decree 204/67, issued at the height of the authoritarian regime that lasted for decades in Brazil and froze almost all states in relation to their lotteries for many, many years.

For more than 50 years, the Union defended the monopoly on lottery operations in the country. And after more than half a century, the Federal Supreme Court, in the judgment of ADPF's 492 and 493, made it clear that ALL FEDERATIVE ENTITIES will be able to compete with each other to obtain the preference of bettors.

This decision, taken unanimously by the country's highest court, is now being challenged by a legislative decision (absolutely legitimate, by the way, as it is the responsibility of Congress to legislate) that prevents State Governments from contracting with the best operators, as each operator will have to make “a Sofia choice” to define their strategies in the country, as they will be required to participate in the bidding processes of only one State. In other words, 26 states will be prevented from hiring the best operator in the world!!!

It is very likely that the rapporteur of Bill 3,626 in the Federal Senate, Senator Ângelo Coronel, did not realize the real effect of such a measure, especially since he brought in his report so many advances in relation to the segment, such as the tax reduction for companies on GGR, an appropriate taxation model for bettors, increasing the accreditation period and several topics very well defended in its report.

The approval of Bill 3,626 in the terms of the report, including the second paragraph of Article 35-G, will bury the aspirations of the states to have minimally competitive operations with the federal sphere. And that is the crux of the matter. Perhaps whoever requested the inclusion of this provision in the report knew what they were doing. And whoever complied may have been misled with an argument that did not reflect the magnitude of the issue.

In practice, the Union can hire the best operators in the world, but these same operators can only enter into a similar contract, even if the conditions of the states are more favorable, in just one state of the Federation, creating a hierarchy among the states. In other words, a true ranking of importance, violating the federative pact and all its aspects.

And the worst part is that this restriction is not exclusive to fixed-odds betting. It encompasses all lottery modalities of the states, significantly compromising their involvement in the gaming and lottery sector. A real blow!

An aberration that goes against common sense, the principles of advantage, transparency, and everything else that follows from a competitive bidding process to seek the best proposal. I won't even delve into the legal and constitutional issues of the measure, as we will certainly have various stakeholders sparking the discussion. I will limit myself to the technical and operational aspects of the measure.

It inaugurates the principle that the best proposal will only apply to one state, the second-best for another, and so on. Leaving the lagging states with "crumbs."

Let's be frank, which operator will risk being left out of São Paulo? And if São Paulo takes time to decide its operator hiring process? You don't need to think too much to draw conclusions.

Is there anything more incompatible with public ethics than this? I am unaware of it.

A warning to the governors of the states. Either stand up against this injustice or get used to having your lotteries operated not by the best, but by those who lost bidding processes in other states!!!

This is the result of a simple paragraph included in the final text of a Bill.


Hamilton Noble
Director of Hebara Distribuidora de Produtos Lotéricos S/A and has been working in the games and lotteries segment for over 30 years