SBC News October Elections loom over all judgements of Brazilian sports betting

October Elections loom over all judgements of Brazilian sports betting

Once on autopilot, the passage of Brazilian gambling and sports betting was destined to arrive uninterrupted in 2022, bringing South America’s biggest consumer market into play.

Under review since 2018, the legislative frameworks for sports betting and online gambling had been approved by congress and senate committees, as two bills were put forward to the office of President Jair Bolsonaro for final sign-off, destined to become federal laws.

A regulatory journey that had overcome COVID-19 interruptions and a change in legislative stewards sought a cinematic conclusion with the desired launch of a federal sports betting regime by this winter’s Qatar World Cup 2022.

Yet come the summer hopes were dashed, as President Bolsonaro and the Liberal Party were reported to have cold feet on signing-off and launching sports betting and gambling regimes ahead of Brazil’s divisive October General Elections.

SBC News October Elections loom over all judgements of Brazilian sports betting
Roberto Regianini – FBM Gambing

“Believe me…this is a very Brazilian affair,” said Roberto Regianini, CEO of FBM Digital Systems, the subsidiary of LatAm gambling group FBM Gaming.

A Brazilian native, who has observed Brazil’s stop-start regulatory proceedings for the past 20 years, underlined that the marketplace would “follow no conventional wisdom, in its approach towards launching.”

Though “progress remains progress”, Regianini cited that stakeholders should be aware of the exact directives that have been put forward for federal sign-offs.

He restated: “It’s important to recap that the Senate has approved two modalities that want to legalise sports betting and gambling.”

“This is important, as many believe that the frameworks are settled, and this is simply not true,” – Regianini noted, citing that a government still needs to ratify a licensing system, taxation policies and technical accreditations.

Henceforth, the winner of Brazil’s October Elections will be charged with finalising federal gambling duties, as Regianini declared “this is the million-dollar question that needs to be answered?”

Monitoring political developments, Regianini poured cold water on a Winter World Cup launch, stating that the winning party would have less than a month to finalise regulatory requirements.

“A Qatar launch is unlikely to come. We would recommend lawmakers focus on a Q1 launch next year, with time to satisfy all licensing and regulatory conditions needed.”

SBC News October Elections loom over all judgements of Brazilian sports betting
Andreas Bardun – KTO Group

Frustrations at Brazil being unable to clear its “final regulatory hurdle” were underlined by Andreas Bardun CEO and Founder of KTO Group. 

An investor in the Brazilian sports betting market since 2018, as KTO established its KTO.Brazil sportsbook brand awaiting the market’s formal launch, Bardun said “It really is now or never for Brazil…”

“The terms applied to the two Bills stated that regulations must be established within a four-year period, or else congress must restart the process,” he explained, adding “we really cannot afford to have that outcome”.

According to KTO’s CEO, the scenario of Brazilian sports betting and online gambling being settled by a divisive General Election is a “situation that should have been avoided, but will be accepted if it guarantees the market’s launch”.

Should a positive outcome ensue, Bardun believes that Brazil will become online gambling’s next transformative marketplace – an opportunity that lawmakers appear to have not grasped.

“In my opinion, the lawmakers have not understood the opportunity of the online gambling market to reshape Brazil.” Bardun stated – “and I’m not just talking about tax takings.”

“It should be treated as a completely new industry that can provide new high-paying jobs in customer service, tech, payments, and business intelligence… This is what the politician’s campaigns say they want, and it should be delivered.”

Though yet to receive its federal approval, since 2018 sports betting has become intertwined with football sponsorships that have come under the investigation of SENACON – Brazil’s National Consumer Secretariat.

SBC News October Elections loom over all judgements of Brazilian sports betting
Fellipe Fraga –EstrelaBet

In August, Brazil’s Ministry of Justice announced the launch of an investigation into the commercial partnerships of sports clubs and media owners struck with online sportsbook operators. 

The investigation was due to concerns by SENACON that commercial arrangements were agreed upon without Brazil having finalised the laws and standards that will be applied to a pending federal sports betting regime.

Aware of unnecessary conflicts, Fellipe Fraga, Chief Operating Officer at EstrelaBet, questioned SENACON’s motivations to review Brazilian football and media sponsorships that had been allowed since 2018.

“They are acting in the opposite way of the government,” Fraga responded. “The Ministry of Justice has no has no power to police contracts and tell football clubs what is ok.”

Fraga underlined that the terms of sponsorships involving Brazil Serie A teams Palmeiras and Fluminense had been ‘transparent to the public, in their involvement with betting firms, who are committed to applying for sportsbook licences”.

SENACON’s investigation of sponsorships, therefore, presents a further market contradiction that must be settled before the arrival of a federal sportsbook framework.

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