“All of the concerns are also shared by the Ministry of Finance. The diagnosis is that a lack of regulation since the first legalization [in 2018] has led, on the one hand, to a significant increase in the activity and, on the other, to a lack of control,” Regis Dudena said.
The secretary argued that regulating the activity is “the best solution” to address the sector’s problems.
“The demand for the service is real and any eventual declaration of unconstitutionality of the law will only direct Brazilians to an illegal, unsafe market with harmful effects, such as fraud, money laundering and the exploitation of gamblers, which tend to worsen, increasing mental and financial health problems, such as over-indebtedness,” he stated.
Dudena assured that, without regulation, the government will not benefit from the positive aspects, which include tax collection and the social allocation of resources.
“Regulation is the best way for the State to have a presence in the sector and this presence will only be full, effective and efficient if the constitutionality of Law No. 14,790 is recognized by this Supreme Court,” he ruled.
ANJL also warns: unconstitutionality of Law 14,790 would encourage the illegal market
The legal director of the National Association of Games and Lotteries (ANJL), Pietro Cardia Lorenzoni, reinforced during a public hearing at the Federal Supreme Court that any declaration of unconstitutionality of Law 14,790/2023 will only ensure the operation of the illegal market in Brazil.
“If the Direct Action of Unconstitutionality (ADI) is accepted, it ends up, contrary to its own objective, doing what it seeks to prohibit or prevent, which is the encouragement of pathological gambling, illegal gambling,” said lawyer Pietro Cardia Lorenzoni, legal director of ANJL.
The session was called by Minister Luiz Fux, rapporteur of Direct Action of Unconstitutionality (ADI) 7721, in which the National Confederation of Commerce of Goods, Services and Tourism (CNC) requests that the Betting Law (Law 14.790/2023) be declared unconstitutional by the STF.
He also highlighted that data from ANJL show that, in the first year of the regulated market, the sports betting and online gaming market will produce around 60 thousand jobs and a revenue of around R$ 4 billion (US$ 700m) with federal concessions, without considering all traditional corporate taxes, which will have to be paid by bets and will reach approximately 37% of their revenue.
The legal director emphasized that the growth of gambling in Brazil was due to the characteristics of the Brazilian market and not to Law 14.790. Among these characteristics are a growth of 25% to 40% between 2019 and 2024; the size of the population, of around 217 million inhabitants, while most regulated countries have around 30 million; and, furthermore, a very low or non-existent tax cost, operational cost and regulatory cost.
“And it is precisely this scenario that has caused the reality we are experiencing today, with its harmful effects. There are currently four thousand active betting sites. Many of them are involved in fraud, including crimes against the popular economy. And this is not the reality for those who seek legal and regulated gambling,” said Pietro.
Impacts on consumption and retail are not confirmed
In his explanation, the legal director of ANJL also refuted the allegations that the betting market would be impacting the consumption of Brazilian families and, consequently, the performance of the retail sector.
“Precisely in this sense, regarding the argument of family debt and reduced consumption, the Itaú study, in contrast to what was presented by the CNC, indicates that the impact of betting on the retail sector is insignificant. The presence of betting does not represent more than 0.23% of the national GDP,” stated Pietro.
Another point raised by the lawyer was the possible prohibition of advertising in the gaming market in Brazil, which would be extremely harmful to the sector and would also only bring benefits to betting houses that wish to continue operating outside the law. “Advertising is one of the essential ways to differentiate regulated gaming from unregulated gaming,” Pietro highlighted.
At the opening of the session, on Monday morning, Justice Luiz Fux said that the central idea of ??the public hearings is to have the Court listen to experts, since not all of them have the expertise of the STF, such as those in the betting market. “The idea is to have as much interdisciplinary information as possible,” said the Minister.
Fux also highlighted that Law 14.790/2023 was approved by what he called “the people’s house” and that the Supreme Court is only intervening because it was requested to do so. “The Supreme Federal Court was asked to verify whether this law is in accordance with constitutional values. Therefore, for this reason, we are obliged by the Constitution to have a say on whether this law is constitutional or unconstitutional,” he emphasized.
Launched in March 2023, the National Association of Games and Lotteries defends the interests of its members, the sector and responsible and honest gaming, always guided by the promotion of sports, the security of bets and the contribution to the country’s economic development.
Partners include galera.bet/Playtech, Big Brazil, F12, PagBet, Betnacional, Mr. Jack, Parimatch, BetFast, Aposta Ganha, Liderança Capitalização, Z.ro Bank, Propane, Paag, Clear Sale, BetBox tv, StarsPay, 1xBet and PG Soft.
Source: GMB
