Part 1: Setting the scene
Brazilian gaming regulation: a short history
• 1940s Most forms
of gambling
prohibited, with
casinos and bingo
halls shutdown
• 1961 Federal bank
Caixa granted a
monopoly to run
lottery games
• 1990s ‘Zico’ (1993)
and ‘Pele’ (1998)
laws introduced
to allow state
authorisation
of land-based
bingo halls
and electronic
gaming machines
• 2000s Country’s
bingo sector
shut down
following
Presidential
(2004) and
Supreme Court
(2007) decisions
• Dec 2018
President signs
PM 846 into
law, authorising
sports betting
• Feb 2019 Bill
introduced to
authorise casinos
in integrated
resorts
Source: Morgan Stanley
Andre Gelfi: “Based on the liberal
approach of the current government
office I personally expect an
unlimited number of licences,
founded on a set of restrictive
regulatory requirements.”
Alberto Alfieri, chief operating
officer at bet.pt owner BetCorporate,
currently developing Brazil-facing
brand Vivagol, adds: “I really hope
for an open amount of licensees,
otherwise there will be issues for
the market from the beginning, with
unfair competition and shadowy
criteria for accepting certain
licensees over others.”
“I believe that Brazilian authorities
and legislators understand this
and know that they can’t go wrong
if they keep this [process] open
and transparent.”
Another possibility, however,
is for the government to opt for
a limited number of licensees,
likely accompanied by some
upfront capex spend, according
to Morgan Stanley.
Maximiliano De Muro, until
recently the regional manager in
Latin America for Mr Green, says this
would give authorities the option of
widening licensing at a later date.
“The government would like to see
how it goes first,” he explains.
The decision over the route taken
will emerge next year, according to
Marcelo Munhoz da Rocha, a gaming
consultant with BetConsult in Brazil.
“What we have been hearing is that
the regulation for sports betting
[to] be finished by the end of 2019,
and that the initial processes of the
licence granting shall happen in early
2020,” he says.
Land-based and online?
It has also yet to be determined
whether the legislation will
encompass both retail and online
within its purview and also whether
it might be implemented on a
regional basis. We do, however,
know the tax structure. According to
Morgan Stanley, as it stands online
operators would be subject to a
minimum payout of 89% with gross
win capped at 8% and the remaining
3% handle to be remitted as tax.
However, it notes that this could
change, suggesting that a mid-20%
tax rate has been mooted.
Dawn of the Bolsonaro era
Aside from issues around the format
and the forms of sports betting
to be allowed, the other main
imponderable is the extent to which
the new Bolsonaro government will
get involved in the process.
His government is composed of
a volatile mix of liberal, free-market
minsters and advisers combined
with deeply illiberal and conservative
instincts at the top, including the
President himself.
The view on how the government
will proceed is complicated by the
arrest of former President Temer
– the man who signed the sports
betting bill into law – on corruption
charges. Should the Bolsonaro
BRAZIL The regulated opportunity in Latam’s largest market
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