Brazil mulls accelerated betting regulation as part of national privatisation package
Government publishes resolution privatising fixed-odds sports wagering to “stimulate economic development”
The Brazilian government published last Friday in the Official Gazette Resolution No. 134, of 10th June 2020, issued by Economy Minister Paulo Guedes, which would include the privatisation and drafting of the regulation of fixed odds sports betting in Brazil’s National Privatisation Program (PND).
Details of a parliamentary resolution were revealed earlier this month, while the full resolution was published in Brazil’s Official Gazette on Friday.
Under the resolution, fixed-odds sports betting will be included within the Investment Partnership Programme (PPI) of the wider PND scheme, under the oversight of the National Bank for Economic and Social Development (BNDES).
The text of the decree cites the privatisation of sports betting as being based on “the need to reorder the strategic position of the State in the economy, transferring activities unduly exploited by the public sector to the private sector”.
Privatisation aims to ease the economic burden on the Brazilian state, with a view to generating investment and employment opportunities in the country for international firms. At present, lottery gaming is included within activities under state control, but lottery and fixed-odds sports betting would be available to private operators if the decree is given the green light.
The process aims to “stimulate national economic development, especially through actions focused on expanding and improving the services provided to the Brazilian population”.
However, the final decision on whether fixed-odds sports betting will be included within the PND rests with Brazilian President Jair Bolsonaro. Should this occur, a study period will be opened to examine the possibilities of privatisation, including the creation of a gambling regulatory framework.
Neil Montgomery, founding and managing partner at Brazilian law firm Montgomery & Associados, claimed the inclusion of fixed-odds sports betting within the PND should in theory accelerate the regulatory process.
“Given that the BNDES is currently headed by liberal-thinking directors, it is expected that the BNDES, upon engaging financial, market and legal specialists to conduct the study, be instrumental in shaping the regulations to become more attractive to the market as a whole,” said Montgomery.
“This is at least a very clear sign that the Federal Government has moved the regulation of fixed odds sports betting to its list of priorities,” Montgomery added.
A process to legalise fixed odds sports betting operators was first ignited by the Brazilian government in 2018, with a proviso for a two-year window for the creation of regulations and licensing standards but with the possibility of being extended for an additional two-year period.
The process is being administered by the National Secretariat for Public Policy, Planning, Energy and Lottery (SECAP) but has been dogged by delays, with questions raised over elements including the constitutionality of the law itself and the taxation of operators.
In February, Brazilian media claimed the government was looking to change its regulatory model entirely over concerns about the punishment of illegal operators. SECAP had been expected to release the first draft of regulations in H2 2020 at which time licence applications would be accepted. However, Brazil has been severely impacted by the coronavirus pandemic, with the death toll second only to that of the US.
Its economy is expected to shrink significantly due to the negative financial fallout of the pandemic.
Source: iStock/filipefrazao