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Brazilian government changes sports betting regulation model to concession

SECAP will announce this week a new regulatory model for sports betting in Brazil with an important change. The open authorization system announced last year becomes a concession regime with a limited number of companies that can operate in the country. In addition, a third public consultation will be launched for the market to give its opinion on the main issues related to the law. As a result, the month of March became unfeasible to complete the regulation, which passes to the beginning of the second semester.

According to a very important source from SECAP (National Secretariat for Public Policy, Planning, Energy and Lottery), the change is due to a legal imposition by the Ministry of Economy. The Attorney General's Office of the National Treasury (PGFN) understood that, under authorization and with the current law, the model would not advance on the issue of penalties, nor could the license be charged.

In the end, the ME considered that it would be a very precarious contract, in line with the current law. For this reason, the Secretariat decided to change the model for concession. In this case, only a certain number of companies will be able to operate legally in the market in the next 9 years.

The first number evaluated was to grant permissions to 50 or 60 companies that comply with the new guidelines that will be known later. However, this would only be defined after the analysis of the new public consultation that will be launched at the beginning of next week.

The three main points of the public consultation that SECAP will conduct next week are:

1) The presentation of the “Concession in a competitive environment” as a modality to acquire the right to exploit fixed-odd sports bets;

2) The submission of a proposal for a maximum number of companies that may operate in the country, as a result of the choice of the Concession;

3) The new text of the draft decree, which is more simplified and already considering the recommendations of the PGFN regarding legal compliance with the document exposed in the previous consultation.

Regarding the term of the regulation, in view of the understanding signed between PGFN and SECAP for the choice of the concession model, there will be a need for studies to determine the minimum grant amount and to prepare a public notice and contract. As a result, the month of March became unfeasible for the end of the regulation, moving to the beginning of the second semester.

This is a third consultation that the ministry promotes on the subject. In the first, held at the end of July last year, the objective was to gather the opinion of citizens about the sport, with 1,849 contributions. Then, in September, SECAP wanted contributions, based on the minutes of the decree in relation to market regulation and collected 2,644 contributions.

On the other hand, the model change can radically complicate the plans that many medium, small and local companies had and opens the door to the most relevant players in the international sector, whose economic power gives them more chances to obtain one of the coveted concessions.

Source: Exclusive Games Magazine Brasil