SPORTS BETTING
Te government is moving ahead with plans for a sports betting expansion. Te bill found overwhelming support and was passed through both chambers in record time and the government is firmly behind the new the new act.
Provisional measure 846/18 as it was originally called (the bill is now called Law 13756/2018 as it is under review before being put before the full plenary), will allow for both online and land based sports betting. Te bill deals mainly with how lottery funds are distributed giving more priority to National Security. A much larger proportion of resources operated by Brazil’s largest state owned bank and lottery operator,the Caixa Econômica Federal (CAIXA), will be earmarked for public security, while the bill seeks to raise additional income for the government by green lighting sports betting and gives the Ministry of Finance initially just two years to get sports betting up and running. However, this can be extended for another two years.
It is believed that that the Ministry of Economy is looking at international regulatory models to understand what framework would be best suited to Brazil and the government could
LOTEX
In September the government launched a new raft of privatization projects. Eight including LOTEX were already part of the privatization program. Up until recently the government has been trying to grant the private sector the right to run LOTEX, but all attempts have failed due to lack of interest from potential stakeholders.
Te Brazilian Development Bank (BNDES) a federal public company associated with the Ministry of Development, Industry, and Trade and the main financing agent for development in Brazil has been overseeing the privatisation of CAIXA’s instant lottery arm. It has postponed the lottery auction at least five times since last year in order to attract offers. However, in October it was announced that LOTEX will be split between two of the gaming industry’s biggest names; International Game Technology and Scientific Games. Te two are likely to split the $200m scratch card contract with a launch by September 2020. Te consortium made an initial payment of 97 million reais ($23.66m) for the right to operate LOTEX, according to members of the consortium.
According to the Secretariat of Evaluation, Planning, Energy and Lottery (SECAP), Alexandre Manoel Angelo da Silva, the deal
Te Federal Government already has a draft of sports betting laws ready. Tere will be no limits on the number of sports betting licenses. In order to operate in Brazil, operators will
pay an authorization fee of R$3m (almost US $740,000) in a single payment. Te license will be valid for nine years, and operators may renew their licences at an updated value once the initial term of their licence ends.
propose a preliminary version of sports betting regulation before the end of the year. Te Secretariat of Evaluation, Planning, Energy and Lottery (SECAP), which comes under Brazil’s Ministry of Finance, launched a public consultation in July in order to collect suggestions regarding the regulation of sports betting. According to a number of local sources Te Federal Government already has a draft of sports betting laws ready. Tere will be no limits on the number of sports betting licenses. In order to operate in Brazil, operators will pay an authorisation fee of R$3m (almost US $740,000) in a single payment. Te license will be valid for nine years, and operators may renew their licences at an updated value once the initial term of their licence ends.
In addition, each operator will pay a different amount per month, depending on if they offer land based sports betting, online or both. For those companies which operate land based sports betting the rate will stand at R$20,000 (US$4,920). For companies that operate online sports betting the amount will stand at R$30,000 (US$7,380), and for those that run both the fee will stand at R$45,000 per month (US$11,100).
means “the break up of a 58-year monopoly over the national lottery industry. It represents openness to competition and a paradigm shift for the country.”
THE FUTURE
Te shift in gaming policy could carry over to casinos which were banned over eighty years ago. Momentum for change grew significantly under the previous administration as legislation was debated as part of “Brazil Agenda” a set of new rules put forward by then serving President of the Senate, Renan Calheiros in 2016 – a business-friendly agenda which was designed to provide a much needed boost to economic growth. Te sell off of LOTEX in 2019 was part of that agenda and is a crucial development because it means that the first step has been taken towards a more competitive gaming industry. But while the privatisation of Lotex and the opening up of the sports betting market are two highly significant developments Bolsonaro’s dependence on the evangelical bench for support is crucial. If its leaders come out against an expansion of gambling, Bolsonaro will undoubtedly toe the line meaning that there will be no expansion under his watch.
NEWSWIRE / INTERACTIVE / MARKET DATA P49
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