Regulation advocates use the word "billions." It appears in the context of the volume of money, the federal government's collection, the size of the market or how much companies in the sector have not paid in taxes because of the legal limbo in which they operate.
To be regulated in a Provisional Measure (PM) that may become a bill, sports betting sites are almost ubiquitous in Brazilian football. They sponsor 19 of the 20 teams in the Brazilian Serie A Championship. The exception among the country's elite is Cuiabá, but the club displayed the brand of a company in the sector last year.
The Minister of Finance, Fernando Haddad, estimates that the volume of taxes to be collected from the regulation is up to R$ 15 billion (US$ 3b). Data from the Central Bank show that, in the first quarter of this year, US$ 2.7 billion were sent abroad in sports betting. On the other hand, little more than US$ 1.7 billion returned to Brazil in the form of prizes payments to players.
According to estimates, the billing of the houses could reach R$ 12 billion (US$ 2.4b) in 2023. This is a 71% increase compared to 2020 (US$ 1.4b). But the size of the market, considering all the money moved, could be much bigger. In March, Brazil’s Legal Gaming Institute estimated that the volume used to receive bets and pay prizes is around R$ 100 billion (US$ 20b).
"If we apply the draft of the proposal for a Provisional Measure, we will observe that almost R$ 20 billion (US$ 4b) in collection were left out. But the question of how much the government stopped receiving in taxes due to the lack of regulation is something complex. Determining the amount exact number is difficult," says Cristiano Maschio, CEO and founder of Qesh, a payment institution that operates in the sector.
Seen as the country with the greatest growth potential in South America, Brazil represents a small portion of a market that is expected to grow by 10.3% per year until 2030.
A study released by Grand Review Research points out that global sports betting should jump from US$ 70.23 billion in 2021 to US$ 182.12 in 2030. This expansion should be driven, according to the company, by the growth of the available structure and by new regulations in different nations. The emergence of artificial intelligence instruments and the expansion of cryptocurrencies will further boost the market.
BETTING SECTOR IN NUMBERS
If the fastest growing region is Asia, the United States draws attention for the wave of liberation in the states, responsible for deliberating and establishing laws on the subject. And football was the sport that represented the largest market share in the country in 2022.
"It is a source of revenue for the clubs and for the government, but it will not solve either the clubs' or the government's problems in terms of revenue. from primary deficit to zero next year," analyzes economist Luciano Nakabashi, professor at the Faculty of Economics, Administration and Accounting at USP (University of São Paulo).
The issue of sports betting regulation appears at a time when the Public Ministry is investigating the biggest match-fixing scandal in Brazilian football since 2005, when the "whistle mafia" was denounced. It was a clandestine betting scheme that involved referee Edílson Pereira de Carvalho.
Launched in November 2022, the Maximum Penalty Operation investigates a group that defrauded sports betting in Brazilian championship games in the A and B series last year and in state championships in 2023. More than 50 players are mentioned in the process, and 15 have been denounced so far. Four admitted guilt and entered into a non-criminal prosecution agreement with the Public Ministry.
The prosecution of the STJD (Superior Court of Sports Justice) asked for the suspension of eight investigated athletes. They suffered a 30-day preventive hook. For the Public Prosecutor's Office, the head of the scheme is Bruno Lopez de Moura, owner of an athlete agency company and a former futsal player. He is arrested. His defense states that "the accusations will be formally and procedurally answered in due time."
"With non-legalized betting, it is not possible to use official channels, such as banks, to send money out of Brazil, or the other way around, in order to pay for operations resulting from betting. The scenario we see is that a part of medium and large companies in the sector accepted the existing risks and set up operations in the country with the aim of not losing market. Several other companies were more cautious and are waiting for regulation to finally enter Brazil," defines lawyer Eduardo Carlezzo, specialized in law sporty.
Bookmakers use a loophole in the legislation to operate in the country. Until the regulation, they do not have headquarters and do not pay taxes in Brazil. Any legal dispute has to be resolved in the country where the company is registered. Usually in a tax haven.
The federal government estimates that, even in this situation of legal precariousness, the approximately 500 bookmakers operating in Brazil invest approximately R$ 3 billion (US$ 600m) in advertising annually.
In the US, where states are discussing limitations on advertising by these companies, it is estimated that sports betting has moved, since 2018, more than US$ 220 billion, according to the New York Times.
"It is crucial to establish a balanced tax structure, which gives full transparency to the government, which does not overburden betting operators, encouraging them to operate legally, thus avoiding negative effects on the market. It is important to recognize that the existence of a deregulated betting market becomes fertile ground and can open space for groups of malicious gamblers who seek to corrupt players, referees or others involved in competitions," says Cristiano Maschio.
The expansion of bets also carries the concern of the other end of the chain. Gambling can become an addiction. Countries like the United Kingdom have developed self-regulation mechanisms for companies that perceive, in theory, customers who may be spending more than they can afford. In Brazil, this subject has not yet been debated in greater depth.
"In the long term, the bettor is expected to win and lose more or less in a close proportion. As a part goes to the intermediary that offers the betting service, the expectation is that in the end the gain will be negative [loss]. So, this is leisure. The person cannot count on this as a source or complement of income," says Nakabashi.
Source: Folha
