Hello fans of Games Magazine Brasil, it is a pleasure to be here once again.
What brings me to the keyboard is the feeling that the Country is doing the right thing for the wrong reasons. And it usually does not end well.
Last week, Mr. Mansur was at the GovRisk’s event in Brasília, when he had the chance to make a brief of what is going on regarding to the sports betting regulation. In a few words: the taxation is higher “one more time again” and the draft of the regulation is under analysis of 6 different ministries.
He didn’t put in these words, but the way I understood it, not only by his words but mostly from the non-verbal language, is that it will take a little while to be released. Well, some people thought it would be published the next day and it didn’t happen.
Well, for me, no surprise at all. I recall that in the beginning of the year we received the news that it was going to be regulated before Carnival. I doubted. Right after Carnival, a sequence of “it comes next week”, like will be signed when Lula comes “back from USA”, “back from Russia”, “back from China”, “back from London”.
I will repeat here how I understand what is happening. The Labor’s Party (PT) was never in favor of gambling. They had in hands the PL 442 for 13 years and never advanced any kind of negotiation with the Parliament. In 2007 Lula banned Bingos, alleging anti bribery measures. The Vice-President is not in favor either. His best allied, José Serra, expressed himself several times against gambling.
What have changed, then?
The Govern needs financial resources to support social programs and the idea to tax sports betting seems to be one of the necessary measures to support priority projects.
I have been saying that the Government is trying to do the right thing (regulate sports betting) for the wrong reasons (tax collect). This mindset will not lead to an attractive market for operators. I might be wrong, but since the Government held this subject under its wings, taxation model increased 5 different occasions. Every draft brings a little higher taxation, a new contribution, a new rate.
Big operators met the Government a few times this year and, not noticing this, provided small signs about the acceptable taxation. Well, if you say to whomever you are negotiation with, that you can handle to pay 10, naturally they will reply with 15. If you tell them that you can handle 15, under certain conditions, they will throw a 20 on your lap. And now, at the end of the day, we have almost 30 :)
What these operators didn’t know is that the Government never had in mind a healthy betting environment, but exclusively tax revenue. The more, the best. But, Witoldo, you may ask, what if it becomes unfeasible? Well, id answer: it will be unfeasible to ALMOST everybody.
Giant operators and national ones will still have margin to operate under these circumstances for a longer period, until they convince the Government to slowly bring taxation down. But, when it occurs, instead of having 30, 50 operators, there will be 8 and the entry barrier will be brutal.
If we want a healthy market, there is only one chance, according to my humble point of view.
We must stimulate the Senate to re-insert sports betting on the bill of law 442. I recall the reader that sports betting was always there, but removed by the Provisional Measure of the President Michel Temer, furtherly converted into the Law 13.756/18. If the Senate do not decently reinsert the sports betting in the bill of law 442, we can forget the dream of a “multioperated” market, with dozens of operators in country and a healthy environment.
We will have, indeed, a very limited market, with operators and players heavily taxed; and we will continue to pretend chasing illegal gambling like we are doing for the past 70 years, and like do, today, Portugal and France.
Congrats to all involved parties!
A big hug to all and see you next time!
Witoldo Hendrich Jr.
Legal Director and Partner - Online IPS, exclusive to GMB
