To grasp the importance of Brazil in the market, there was a panel at the event entirely conducted in Portuguese with 100% Brazilian speakers.
"Brazil was in the spotlight, and the expectations regarding the rules to be prepared by the Ministry of Finance are enormous, not only because of the potential involved but also because many jurisdictions are creating rules to force companies to seek only regulated markets," said Jun Makuta, a partner in the Gaming and E-sports department at TozziniFreire Advogados, who participated in the event.
"Entain, one of the largest global sports betting operators, announced its withdrawal from over 100 unregulated countries throughout 2023, and the trend in multi-jurisdictional M&A operations is that operations in unregulated markets may not even be considered for valuation," Makuta added.
Makuta emphasized that the fact that foreign sports betting operators demonstrate real interest in investing in Brazil does not mean that all of them will effectively seek authorization to operate regularly in the country. According to him, regardless of the strictness of the rule, there will always be companies that choose to operate in the gray market, as occurs in other countries, even those considered reference, such as England.
"While existing rules were largely considered satisfactory because they had significant operator participation in their genesis, operators are increasingly attentive to the new challenges they will face when regularizing their activities in Brazil, which are common to entrepreneurship in our country," explained the specialist.
For the TozziniFreire partner, a major challenge for the regulator will be how to treat the new games whose production is accelerating due to technological innovations, and thus reduce the gap between legislation and the reality created by the market, offer adequate protection to players, and create mechanisms to ensure a transparent, ethical environment adhering to the rules of responsible gaming.
"The process of creating new games, increasingly attractive and creative, is faster than ever with the widespread use of AI, machine learning, and other technologies. Simply banning certain types of games will not produce the desired effects because new games with innovative mechanics will always emerge, as will players inclined to try them, whether they are available in the regulated market or not," said Makuta.
"The reality always prevails, and therefore, it is more valuable for the regulator to ensure that those who offer them are responsible companies committed to the integrity of the market than simply adopting a prohibitionist stance regarding a particular game," he added, referring to games that recently caused controversy such as the "little tiger" or "little airplane."
Brazilian presence at ICE London 2024
ICE London was marked by the massive participation of Brazil in the event with the presence of hundreds of Brazilian companies of various types, including operators, payment methods, certifiers, identification, various SaaS, numerous other techs.
"I noticed the massive presence of many Brazilian professionals working or starting to work in the sector, such as consultants, banks, funds, and other types of institutional investors. Portuguese was heard from all sides: in the booths, in the restaurants, in the presentation panels, on public transport. ICE London showed that Brazil is at the forefront of the sector," said the lawyer.
Caio Loureiro, a partner in the Gaming & eSports area of TozziniFreire Advogados, emphasizes that despite all the interest from foreign operators and investors in Brazil, there are still many doubts about the legislation.
"Brazilian regulation has specific nuances, with emphasis on the legal nature of sports betting and online gaming, considered a kind of lottery and, as such, a public service, something that is not common in other jurisdictions," explains Caio.
In this scenario, Loureiro states that the pending regulation by the Ministry of Finance could improve or worsen the attractiveness of the country. According to him, what is at stake is precisely how much the regulation will be able to stimulate the regulated and official market, discouraging bettors from using unauthorized operators.
"The greater the legal certainty and the mechanisms to encourage regular gaming, the greater the chances of having a market with a smaller margin of operations occurring in the unregulated environment," emphasizes Loureiro.
Source: GMB
