I have seen countless headlines about the lack of control over gambling and betting in Brazil. This is an extremely serious and worrying situation that needs to be treated with due seriousness by the country’s regulators. Unfortunately, Brazil finds itself in a perfect storm that is unparalleled in other parts of the world.
As my area of expertise is sports betting, I will focus on this. My main responsibility over the past four years has been to understand the regulation and the industry in the various countries where we operate. When I say that the situation in Brazil is unparalleled, I am basing it on this experience.
In recent decades, many countries have regulated their sports betting markets, allowing private operators to develop their activities competitively and under the supervision of a regulatory authority. In addition to being concerned with revenue, these authorities also focus on public health and the prevention of match-fixing. Before that, these markets were mostly monopolized or the activity was prohibited.
The transition of more mature markets occurred when the internet already existed, but it did not yet dominate other forms of entertainment and information in the massive way that we see today. Countries that regulated more recently did so more quickly and with stricter control, limiting the expansion of the market before the regulatory system was in place.
Regulation, even if not very restrictive, inhibits certain behaviors, since a country's general legal framework can be used against abuses.
In Brazil, the perfect storm was formed when the country legalized sports betting in 2018, but it took almost six years to implement a system of rules and licensing. This allowed the market to operate without control. Other factors in the perfect storm include high internet penetration, heavy use of social media, low income and low education levels.
This resulted in absolutely irresponsible marketing, associating sports betting and games with enrichment and investment. The result is what we are seeing now.
This situation raises important questions about the responsibility of influencers and teams towards their sponsors and about the inertia of the government. However, the regulation of sports betting, which has proven to be coherent, must continue.
A total ban on sports betting is impractical, considering the reality of the internet and the experience with gambling at physical points of sale. This genie is out of the bottle and there is no way to put it back. The way to solve this mess is through quality regulation, dialogue with the industry and constant supervision.
I sincerely hope that Brazil does not regress and follows the example of important economies around the world. The solution lies in moving forward responsibly and not in going backwards.
Victoria Fernandes
Head of Legal at Kambi / Regulatory Complience
