GMB - At what stage is the proposal for legalization of sports betting in
Brazil?
Alexandre Manoel - The
creation and privatization of the Lottery modality "Fixed Quota Bets"
can be found as revenues considered in the Budgetary Law of 2017 and,
therefore, the legal framework of this lottery is still viable in the first
half of this year. The Ministry of Finance has already forwarded to the Civil
House of the Presidency of the Republic a Bill on the subject. This step is
immediately prior to submission to the National Congress for its consideration.
As there is no regulation in Brazil, the activity is being exploited by sites
based abroad. Thus, the funds are sent to the countries where these companies
exploit the bets, and there is no counterpart to the Brazilian State. Our
proposal is to offer a legal alternative to bettors-consumers, besides allowing
the generation of significant resources to Brazilian society, in the form of
social transfers to be raised with this lottery.
What are the main characteristics
of the ministry proposal?
The operation of the lottery as a private public service of the Union is
preserved. Caixa Econômica Federal may exploit this new modality by legal
delegation or through its subsidiaries created specifically for this purpose,
similar to the process of privatization "in progress" of the Instant
Lottery Exclusive (Lotex). The Ministry of Finance is responsible for
regulating, supervising, and applying penalties, providing for the exploitation
of the new modality in physical commercial distribution channels and in electronic
media.
Is the system based on some other
already existing among international bookmakers?
It seeks to implement a modern lottery modality, open to innovation. And
that it listens the opinión of the bettors, according to what is verified in
the main lottery markets of the world.
With what billing and tax numbers does
the state work on sports betting?
We are aware that this lottery mode will present considerable amounts.
However, the definitive figures will only be obtained after the studies
foreseen for the definition of the explotation modality to be developed by
specialized external consultants, who will also develop a business plan, the
financial evaluation and the scenarios of stocks composition or the way of its concession, as we are doing in
the privatization process of Lotex. Once this is done, we will have, more
accurately, the data of billing and generation of taxes.
Have you thought
about the allocation of the resources coming from the activity?
The modality contemplates social destination within the current
legislation, with values destined to public safety and social security
(health, social assistance and social security). The tax incidence for the operator
is exactly the same as that currently practiced for any legal entity in the
country. In addition, the current income tax system in the lottery awards will
also be maintained.
Why should Brazilians choose this system
and not others that already exist? What are the benefits of officially betting?
The exploitation of this modality, in a legal way, guarantees to the
bettors the security and integrity in their bets, with the guarantee that the
prizes will be honored. Equally relevant is the fact that there will be
protection to the bettor, according to the best practices of Corporate Social
Responsibility in lotteries (Responsible Gambling), which is not the case in
illegal games.
What is the expectation of the Ministry
of Finance in terms of the resources that sports betting can bring to the
country if the proposal is approved?
The definitive figures will only be obtained after the studies foreseen for
the definition of the exploitation model. However, we are aware that they will
be significant numbers for the application in various social areas by the
Federal Government. By the way, this application is the main reason, from the
public point of view, for the existence of a lottery modality.
About lotteries in Brazil, what is your evaluation
of the moment the industry is experiencing in the country and what are the
forecasts for 2017?
What happens in Brazil is
that the amount collected by federal lotteries is significant, around R$ 12.8
billion (US$ 41.8 billion), or 0.21% of GDP, in the year 2016. Approximately
40% of this amount is passed on to various sectors Social, such as health, education,
culture, sport and public safety.
Despite this, considering what is happening around the world, we know that the
Brazilian market still has a great potential for growth, for basically two
reasons: first, of the four existing lottery modalities, we explore only two.
In fact, we do not even explore the Instant Lottery, nor do we explore Fixed
Quota Bets; Second, considering the two modalities currently exploited, it is
perceived that the market is highly concentrated in lottery products based on
lotteries (more than 99% share of total sales), with pro-sports lottery
products with a participation in sales of less than 1%. This is an apparent
contradiction, when we know that we live in the "country of football".
How is the LOTEX privatization
process?
The privatization of LOTEX is being conducted by the BNDES (Brazilian
Development Bank), with the coordination and monitoring of the Ministry of
Finance, through the Secretariat of Economic Monitoring (Seae) and monitoring
of the Court of Accounts of the Union and the Ministry of Transparency,
Supervision and Controllership-General Of the Union (CGU). The schedule is
being fulfilled and we expect the conclusion of the privatization of LOTEX by
the end of this year.
What is the position of the SEAE and the
Ministry of Finance about the gaming legalization in Brazil? Is the sector
regulation seen as a good aid to the country's economic recovery?
The two initiatives of gaming legalization in the country in progress in
the National Congress were not proposed by the Executive. In this sense, there
is no Federal Government position on the subject. However, it should be pointed
out that such initiatives, underway in the Chamber and in the Senate, lack
formal evaluation of important areas of the Ministry of Finance, such as the
Attorney General of the National Treasury, the Federal Revenue Service and the
Secretariat for Economic Monitoring, which will be urged to position themselves
before any manifestation of the Executive. The liberalization should be made
from a robust regulatory model, taking advantage of existing international
experience, with an effective monitoring of the costs and benefits of what
becomes legalized. Regarding the regulation of the activity, in a very
particular way, I understand that legalizing gambling is a sensitive activity
for society.
In this way, it would be desirable to have staggered authorization of different
types of games of chance, with the gradual liberation of different gaming
options, so that society could perceive the costs and benefits of legalizing
each of them, probably failing some and approving others.
Source: Exclusive GMB
