GZH - What is the legal status of sports betting today in Brazil?
Pedro Tengrouse - Today, there are no restrictions on advertisements in the media, on means of payment, it is a free operation in Brazil. Most are based abroad, on the island of Malta, on Curacao, on Gibraltar. It is difficult to regulate without knowing in depth, and looking at the economy as a whole, we do not know this segment in depth. We have no information, accurate data. There are estimates.
How can regulation help?
The main stakeholders in regulation are public authorities and society. Regulation needs to focus on three pillars. The first is to protect the popular economy, because today people gamble and don't know if they will receive their winnings. They don't know who to charge and how to protect themselves. The second is the protection of vulnerable people, such as the very young or those with gambling, that is, a disorder that recommends avoiding exposure to gambling. And the third pillar that only regulation can protect is the integrity of the sport.
You mentioned the difficulty of receiving the prizes, are there precedents?
Yes, in 2017, some platforms broke after unexpected results in the Brasileirão. It was necessary to pay a thousand times the value of the bet, and there were no resources for that.
In sporting integrity, aren't we in a bad situation considering Operation Maximum Penalty?
No, it's a global process that affects all sports. It is a phenomenon of our times. These three pillars that I mentioned are not the main interest of the industry, they are the main interest of the government. Regulation is something that has to come from the government.
Is it feasible to protect those who have the disorder?
Yes, that has already happened. A person who lost a lot, a lot of money, complained to the Gibraltar regulator, because the website license was from there, that the tool should have prevented him from continuing to bet, because it was clear that he had a problem with gambling. The regulator investigated, concluded that the allegation was correct, and forced the site to refund the punter's money.
Today, betting sites act based on legal loophole?
Law 13,756, of December 2018, is very clear, it says that fixed odds bets are allowed in Brazil. The text mentions "exclusive Union service", but as it also provides that the operation may be "granted or authorized" by the Ministry of Finance and provides for future regulation, it is understood that it will be competitive. By the way, a good part of these sites already operated in Brazil before this law, in the form of a 'hunting site' to be able to advertise. The main page was a cashless joke, but it had a link to a gambling site.
Why does regulation take so long?
Because we are flying blind. This is a relatively recent phenomenon, nobody is very clear about what to do, what are the best practices. Brazil, in this regard, has the opportunity to learn from the mistakes and successes of other countries. One of the points to be considered is the Macolin Convention, which deals with manipulation of sports betting results. It was born in the European Union, but already has accession from Australia, Morocco and other non-European countries. It is necessary to start working on this regulation from the perspective of a standard international regulatory framework. It would be very positive to seek this reference.
Are we late?
The phenomenon of betting is much older than 2018. Brazil has even lived for a long time with manipulation of games by stakes and bets. there was a serious episode in 2005.
What would be the best way?
Firstly, Brazil should adhere to the Macolin Convention, which the CBF has already requested, in a letter to the Presidency of the Republic. It is an important step towards formulating a robust and integrated national strategy, with the necessary support to overcome gaps in existing legislation. We need a national platform for sports integrity, and it's ready to go, just get it from the source.
Is there still a lot of resistance to regulation?
The history of gaming in Brazil was never defined in democracy. The release was made by Getulio Vargas, in the Estado Novo. There was no discussion with society, there was no social fabric allowing it. Huge investments were made, the Copacabana Palace hotel was built to be a casino, the Quitandinha hotel, in Petrópolis, as well as the Grande Hotel de Araxá, the Cassino da Urca. And still under the validity of the Polish Constitution (nickname of the 1937 Charter, due to its fascist inspiration, in the rules of Poland at the time), Eurico Gaspar Dutra prohibits gambling, also without discussions (there was a constituent national assembly in operation), without procedures beyond his own conviction. Thousands of jobs were lost. Then, the Zico Law, from 1992, released bingos, and a law from 2015 created Lotex. It was a competitive procedure on the stock exchange, the two main companies in the world signed a contract with the federal government to explore exclusively, and finally the STF determined that everything that the Union can, states and municipalities can too. It was very correct, but we had sold an exclusivity that was no longer possible.
Is it necessary to extend the debate about gaming in general?
There is a global phenomenon and we have to deal with it. Brazil has been maturing a lot in relation to the game. A project was approved in the Chamber releasing the games as a whole, which awaits a Senate decision. It's a big step forward. Perhaps it is the first time, in a democratic period, that Congress has manifested itself in relation to the subject. It is necessary to deal with the matter also because each of these sites is not limited to sports betting. Almost all offer casino games such as roulette and bingo. Just open the tab, that's it, there's the casino.
Can you trust the good reception of the regulation and, therefore, the taxation of betting sites?
Tax is tax, there is no good acceptance. The government taxes, and that's it. Those who are taxed do not have to accept, they have to pay. It's like they say, taxes and death you can't escape. It is not voluntary payment, it is imposed, as the name says. Brazil has 400 million electronic devices - cell phones, laptops, tablets - with internet connection that are 400 million potential casinos. There are no conditions to deal with the problem if it is not regulated. This government has been very responsible with economic issues; it has achieved great achievements. Approved in the House the first tax reform in history in a democratic period. You have the opportunity to do the same in relation to gaming. It is nonsense to treat sports betting in a dissociated way. What you have on these sites are casinos that also offer sports betting.
Source: GZH
