The outgoing president of Brazil, Jair Bolsonaro, has thrown the sports betting market of the country into chaos by refusing to sign a decree that would regulate the industry by the deadline of December 12. Bolsonaro leaves office on December 31.
In 2018 former President Michael Temer signed legislation (Federal Law No. 13,756/2018) that created the Brazilian land-based and online sportsbook market. However, the text of the legislation required that regulations be enacted within four years (two years and a two-year extension.) This is something that Bolsonaro, who lost a bitter reelection bid against President-elect Luiz Inácio “Lula” da Silva in November, has declined to do.
During the summer campaign Bolsonaro courted anti-gambling evangelical groups. Evangelicals have argued that sports betting is an entryway to casino gambling. To mollify them he postponed signing the legislation until his second term, which now won’t happen.
Sports betting is considered to be a sure money-maker for the government in terms of tax revenue. Some estimate it could generate R$ 6 billion (US$ 1.2 billion) for the incoming “Lula” administration. That may be another reason for Bolsonaro’s refusal to sign the decree.
The regulations are ready to be implemented, having been published by the Secretariat of Evaluation, Planning, Energy and Lottery (SECAP) and vetted by both the Ministry of Economy and Civil House, a position that is similar to a Cabinet Chief in other countries. They include licensing fees and tax structures.
The president’s refusal to sign the decree leaves the resulting unregulated mess up to the incoming president and Congress to deal with after the first of the year. It could require starting from scratch and passing a new law.
This has created basically an unregulated market, much to the dismay of sports betting heavy weights such as Betsson, 1XBet, PixBet and Sportingbet—which are also sponsors for sports teams and events. All are also based outside of the country and require a regulatory framework to operate legally within it. But since they have existing licenses in their own countries, they are actually probably better off than home-grown sports betting companies, which will have no way to begin operating legally until regulations are in place.
The home-based companies might eventually be accommodated by a proposal to end the Caixa lottery monopoly through legislation that was passed by both chambers to create a Health Lottery and Tourism Lottery. These lotteries could take online and retail sports wagers to benefit the National Health Fund and to promote tourism.
Andre Gelfi, managing partner of Sweden-based Betsson, told Games Magazine Brasil that the sports betting industry will be operating in a regulatory chaos, bound by individual court decisions interpreting the law.
“It will be up to each judge to define the rules — that is, legally, the business will become a patchwork quilt with rules that apply to some and not to others,” said Gelfi. “No one is rowing against the regulation. A part of the government wants it, the operators want it, football wants this security, the publishers are looking for it.”