Despite the restriction in the regulation, which also covers “controlled and controlling companies” through agreements with multinationals, Globo and SBT filed a license request with the Ministry within the August 20 deadline. Professionals with management positions in communications companies were placed in charge of the betting sites.
The Globo Group, which broadcasts the Brazilian Championship, among other sports competitions, has entered into a partnership with LeoVegas, a subsidiary of MGM casinos based in Sweden, using the CNPJs of the Cartola website and Globo Ventures.
Patrícia Abravanel, heiress of SBT and presenter of the channel, will manage her own brand TQJ (Todos Querem Jogar), in partnership with the British company OpenBet. Currently, the channel founded by Sílvio Santos broadcasts matches from the Libertadores and the Champions League.
The Globo Group states that it is not a controlling shareholder of the joint venture with MGM (BetMGM): "We have a minority stake and, therefore, there is no conflict with the aforementioned legislation."
Article 18 of Law 14,790 prohibits the purchase of broadcast and reproduction rights for sports events from betting agents, as well as their subsidiaries and controlling companies — the company that holds the majority of votes on the board of directors. The operating agent is the CNPJ (Tax Identification Number in Brazil) licensed by Finance.
According to Luiz Felipe Maia, a lawyer specializing in betting sites, this provision was created in response to concerns expressed by television stations about the entry of ‘Bets’ - as operators are called in Brazil - into the competition for broadcasting football championships.
“This would tend to make these rights more expensive. This restriction was actually intended to protect media companies,” he says. However, the legislation opens up the possibility for media conglomerates to enter the business as minority shareholders. “It’s unusual,” according to Maia.
Before the government sent the bill that regulated ‘Bets’ to Congress in July 2023, TV Globo’s director of institutional relations, Fernando Vieira de Mello Filho, met with José Francisco Manssur, the former special advisor to the Treasury responsible for the matter.
In the rest of the world, there is no such gradation. The United States, the United Kingdom and Australia, which have large betting markets, allow media companies to control ‘Bets’, imposing restrictions only on advertising. France and Germany, on the other hand, have strict rules to avoid conflicts of interest between broadcasting and betting booths, according to lawyer Rubio Teixeira, founder of the ‘Bets’ regulation company Octus Gaming.
Both lawyers believe that Grupo Globo, which has already declared itself a minority shareholder in BetMGM, will have no difficulty in obtaining the license from the Secretariat of Prizes and Bets (SPA).
In the business registration, the media conglomerate invested R$54.2 million (US$ 9.6m). Therefore, it holds 49.97% of the company, registered with share capital of R$108.45 million (US$ 19.2m). The current director of Cartola, Alessandra Catran Lewit, will be in charge of BetMGM.
The new business also includes Globo Ventures partners Juliana de Araújo Wanderley Labronici, as administrative advisor, and Pedro Menescal and Gustavo Souza de Lacerda, as directors.
MGM Resorts Chairman Bill Hornbuckle, who is listed as a board member of BetMGM, said there is no other company in the market that knows the Brazilian public as well.
"This historic alliance allows us to quickly enter the market with the scale and expertise needed to establish a starting position as one of the leading operators and providers of the best customer experience throughout Brazil," the American executive said during the announcement of the agreement last month.
When asked about possible conflicts of interest between the sale of advertising by Globo's media outlets and the demand for advertising from the new bookmaker, the media conglomerate said it will continue to follow its code of ethics.
"We have an ongoing commitment to the social function of the company, to compliance with legislation and to the editorial independence of our channels and platforms, as can be seen, for example, by the decades of broadcasting sporting events without this interfering with the coverage of our journalism."
Brazilians now have access to the LeoVegas brand, from the MGM group, which hosts online slot machines, such as the tiger game, and sports betting booths.
In a note sent to the Folha newspaper, the Silvio Santos Group states that it has a solid commitment to transparency and compliance with Brazilian regulatory standards in all sectors in which it operates.
The company did not specify its stake in TQJ, which now has R$40 million (US$ 7.1m) in paid-in capital on August 21. On the same date, the vice president of OpenBet for Latin America and Canada, Marc Thomas Crean, and the presenter Patrícia Abravanel joined the company's board of directors, which also includes Marcelo Barp, the financial director of the Silvio Santos Group.
The company's shareholders include the president of the Silvio Santos Group, José Roberto Maciel, the president of Jequiti, Eduardo Ribeiro, and the financial director of the cosmetics company, Luiz Cardoso. The Silvio Santos Group also invited former Bradesco director Alan Marinovic to join the new company, to be its financial director, and former Caixa Lottery president Waldir Eustáquio Marques to be the director of relations with the Finance Minister.
When contacted, the department headed by Fernando Haddad stated that the process of evaluating license requests, currently underway, will take into account all legal restrictions and requirements, as well as the conditions imposed by sub-legal regulations.
In the licensing process, operators must present the entire chain of partners and shareholders of the business up to the final beneficiary. The ordinance specifies that companies in the sector must be associated with the Brazilian National Council for Advertising Self-Regulation (Conar).
"Only companies that meet all requirements and requirements will be authorized." The department said it would not comment on specific cases.
The fact that people from the top management of Grupo Globo and Grupo Silvio Santos are in charge of betting sites, as was observed in both cases, would not imply restrictions under current legislation, says Raphael Paçó Barbieri, a lawyer specializing in sports law at CCLA Advogados.
For Thiago Valiati, vice president of the Brazilian Institute of Regulatory Law, this example shows how businesses will use corporate law to their advantage to comply with the rules. "It is essential to have detailed knowledge of how these ‘Bets’ will be designed and structured, and who will actually be part of the corporate structure, so as not to violate the provisions of the law."
According to Rubio Teixeira, from Octus, a company with the right to broadcast and reproduce sporting events would have an advantage due to the reach of advertising campaigns by media channels.
Source: Folha
