The saying goes that whenever a door closes, a window opens. Sayings are popular knowledge that is passed from generation to generation.
But their perpetuity is not synonymous with veracity, and even less does it mean that they are absolute truths. After all, for every rule there is an exception. And it is exactly in the face of a situation like this that we seem to be facing.
On the one hand, the Brazilian government languishes with the lack of resources for public policies linked to the most diverse areas, such as health, education, security and social assistance. On the other hand, a huge source of funds is not taken advantage of: sports betting.
Sports betting was legalized in Brazil in 2018, through Law 13,756, still under Michel Temer's administration. In the same year, the US Supreme Court, in a case involving the State of New Jersey, declared unconstitutional a federal restriction that prohibited the practice of betting in almost all US states. In short, Brazil and the United States, through different means, both recognized in 2018 the legality of sports betting. At that moment, for both countries, all that was lacking was the regulation of the activity.
The similarity between countries ends there. For while in the United States state governments quickly began to move and regulate betting in their jurisdictions; in Brazil, the federal government, which initially had two years to do so, did nothing, letting the deadline pass and entering a extension of another two years that the law allowed him to implement the regulation.
It is worrying that we are approaching the end of this extension period - which ends in the first half of December 2022 - with no clear signal from the government of Brazil whether or not regulatory standards will be issued.
Meanwhile, in the United States, where regulation has taken place efficiently in many locations, a previously non-existent market has quickly become a gigantic market. Four years after the legalization of sports betting, there are already more than US$ 125 billion in sports betting.
The opening of the market and all this financial movement can generate three types of revenue for Brazil: (i) that resulting from the purchase of licenses/authorizations by operators; (ii) with taxes paid by operators; and (iii) indirect gains from the circulation of capital generated in the operation with direct and indirect jobs that are created.
In the current context, in which the country allows betting companies to operate in the national territory with their headquarters located abroad, the Brazilian State fails to collect (i) the money from the granting of licenses/authorizations; (ii) taxes; and (iii) the indirect revenues that the resources generated in the operation can generate. In short, of three potential sources of revenue that could be offered by sports betting, unfortunately, Brazil does not benefit from any of them.
Furthermore, by not regulating sports betting, companies that are not committed to the final consumer, public policies and the transparency of the activity are allowed to operate in Brazil, discrediting the sector. Today it is estimated that there are around 450 bookmakers operating in the country.
The question that remains in the air is which path Brazil intends to take. What about serious markets like England and the United States that allow the activity, make money from it and set clear guidelines for operators and consumers to feel safe? Or the path of uncompromised markets, which allow any companies to operate without supervision, ignoring the harmful consequences of this, especially for consumers, who are stripped of any legal certainty, and exposure to money laundering crimes, among other harms?
As they say, the horse only passes saddled once, either you jump on it, or you miss the opportunity. This horse called sports betting carries with it three heavy bags of money, relating to the cost of licenses, taxes collected and another with the funds generated with the operation, which makes it even more attractive. Will Brazil ride this horse or will it let it go??? After all, as much as the saying says that whenever a door closes, a window opens, as we said at the beginning, popular sayings are not absolute truths. Is the country willing to take the risk of missing this opportunity? I sincerely hope not.
Rafael Marchetti Marcondes
Chief legal officer of Rei do Pitaco. Professor of Sports and Tax Law. Doctor and Master in Tax Law from PUC/SP. Master in Sports Management from ISDE/FC Barcelona. Specialist in Tax Law from FGV/SP. Bachelor of Laws from PUC/SP. Member of the Brazilian Institute of Sports Law (IBDD).
