The sports betting sector is increasingly gaining pride of place. This time, GE's ‘Dinheiro em Jogo’ podcast welcomed Andre Gelfi, president of the Brazilian Institute of Responsible Gaming, for a long interview. He was received by the podcast anchor, Rodrigo Capelo, and reporter Martín Fernandez.
Gelfi explained the obstacles faced by the sports betting sector since the activity was legalized in 2018, as the segment had to wait practically five years to achieve regulation, which is still under discussion in the Senate.
The process will last until mid-November, given the constitutional deadline of 45 days for its consideration, but Andre Gelfi believes that “by the end of the year we will have the delayed regulation of sports betting.”
And in an interview with CNN this Saturday (30), he reinforced that in addition to the 18% taxation directly on the operation, added to other taxes, it will lead to a harmful rate for the sector.
Débora Oliveira, economics analyst at CNN, identified the “compromise of the viability of some championships, which were left without the sponsorship of bookmakers.” Gelfi said this could actually happen. “When you make competitiveness more difficult, you will have fewer operators and a smaller sponsorship offer, which will further impact those with less visibility.”
Changes are expected
According to Andre Gelfi, there were many discussions between the sector and the government for Brazil to reach this moment, but they need to continue so that in the Senate some “specific” adjustments, as Gelfi said, are made to improve what was approved in the Chamber of Deputies. Deputies.
“We hope that specific adjustments will be made to enable the development of a sustainable market. The text in general is good when it comes to the integrity of the sport, responsible gaming and advertising,” he explained.
In his opinion, the economic issue is what is not good and could hinder the consolidation of a strong legal market. “Taxes and license terms, which are expensive, need to be reviewed,” he stated, making it clear that “it will be the only way for the market to be formalized in the best possible way.”
According to the president of IBJR, “the value of the grant, which could reach R$30 million, for three years of operation, will make life very difficult for the potential investor. The term is very short. It is difficult to make many licenses viable with this value, which is why we advocate reducing the value and increasing the operating period.”
He admitted that a high value helps to ward off potential adventurers, but excessively high and for a short period, “will discourage serious investors who want to operate in the Brazilian regulated market.”
Gelfi also commented that those who say that the tax will be 18% on GGR are wrong. “Added to PIS, Cofins and ISS, it will exceed 30% and this makes the sector unviable, as there will be competition with global players who may not apply for a license in Brazil and customers continue to bet on websites abroad.”
In the digital world, it is difficult to create barriers to prevent users from gambling, according to him. “Taxes need to be tolerable for the operator to be competitive in Brazil. If it is too high, the operator will have difficulties competing with the offshore market, which will offer higher odds,” he attested, reinforcing that “the parallel market is very easy to access.”
Tax is 15% in the UK
The director once again exemplified the United Kingdom market, which guaranteed channeling for 95% of users with a total tax burden of 15%. “If in Brazil we manage to reduce GGR from 18% to 10%, we will still be above the England model, but it will be possible to support and channel players to the regulated market,” he said both on the GE podcast and on CNN.
“One thing is clear. By tightening taxes too much, operators will have to reduce costs. The first budget to be cut will be in marketing,” he said, which could harm Brazilian sport. "A thriving industry represents money for football.”
He estimated that today the sports betting segment is the largest sponsor of football and one of the largest in media purchases and championship rights. “It exceeds R$1 billion,” he said.
Results manipulation
Even the hosts of the ‘Dinheiro em Jogo’ podcast pointed out the damage to the image of bookmakers with the allegations about match-fixing in football. Rodrigo stated that “they are victims of this process,” and asked Andre Gelfi about how the sector saw itself during the allegations.
“We gained an unusual space to demystify the impression that bookmakers had. We really had the opportunity to explain what happens with result manipulation and the damage that the practice causes to operators. With the regulation, all of this will be resolved and there will be an official fight against illegality, in addition to education policies for athletes and managers for sporting integrity.”
Regulated operation
The first half of 2024 will be one of accommodation to a new reality following the publication of the law and ordinances, according to Andre Gelfi. After this, there will be a dynamic of companies applying for licenses and anyone who does not have one will be prohibited from sponsoring clubs or buying advertising. “This should start to happen in 2024, but the process as a whole is long. I think complete consolidation will only be in 2025. In any case, I believe that regulated operations will effectively begin in the second half of next year.”
Source: GMB
