The global sports betting market is looking forward to regulation of the sector in Brazil. It has been doing this for almost five years, since Law 13.756/18 was enacted. However, the procrastination on the part of the federal government in creating clear rules for the segment, combined with the match-fixing scandal, now jeopardizes not only the reputation of Brazilian sport before the world, but also billionaire investments that this production chain can make in Brazil, generating revenue on the same scale.
It is difficult for the international market to understand why Brazil is giving up these resources while the fiscal scenario is dying. A study by the international consultancy H2 Gambling Capital, analyzed by the Brazilian Institute of Responsible Gaming (IBJR), points out that in 2023 the country should move around R$ 84 billion (US$ 17.3b) in sports betting.
According to our estimates, the government fails to collect around R$ 4 million (US$ 825,000) daily because it does not have a regulated sector. In this case, the estimate only includes direct taxes from bookmakers. Considering the entire production chain, the daily loss can reach R$ 10 million (US$ 2.06m).
Distant, but not so much, from this tax collection sloppiness, is what may be the biggest scandal in the history of Brazilian football of all time. The way and pace with which Brazil will deal with the problem will announce to the international sports community, and also to the sports betting sector itself, how the business environment will be after regulation, both in relation to sports integrity, the main pillar of the business betting, as well as the issue of legal certainty, with clear and stable rules regarding the operation of this new market in harmony with Brazilian sport.
In metaphorical language, in the midst of the current complex political scenario, the Brazilian government needs to make its own bet to find the best way to resolve this deadlock with Congress: Provisional Measure (PM) or Bill. The right decision can be the determining factor to guarantee the protection of Brazilian sport and a breather for the public coffers… or not.
If the option is to regulate sports betting through a Bill, even if its urgency is recognized, it will not be able to produce effects until it is approved by both Houses of the National Congress and sanctioned by the President of the Republic. We will have to wait 90 days for the approval of the project, plus 15 days until the presidential sanction.
When opting for PM, the effectiveness is immediate. The text takes effect instantly. In practical terms, this means that the federal government, through the Ministries of Finance, Sports and Justice, would be in a position to immediately adopt measures to combat match-fixing, such as the creation of an inter-ministerial working group with the possibility participation of sports organization entities and representatives of the private sector.
Given this scenario, the IBJR draws attention to the urgency for the Executive and Federal Legislative Powers to opt for the PM as a governmental instrument to regulate the sports betting sector in Brazil. The country wins in revenue and the national sport wins, which will have an ally in the segment to support its integrity, the epicenter of the entire ecosystem that involves this market.
André Gelfi
CEO of the Brazilian Institute of Responsible Gaming
