Brazilian sports betting licences to be limited to 30 under new concession regulatory model
SECAP confirms delayed launch, targeting H2 2020 rollout of finalised regulations
The number of Brazilian fixed-odds sports betting licences could be restricted to just 30 under a new regulatory model unveiled by SECAP (Secretaria Nacional de Politicas Pública, Planificación, Energía y Lotería).
This new regulatory model will be subject to a third public consultation, pushing back the release of the finalised regulations from its prior scheduled March date as far as H2 2020.
The shift from an authorisation model to one where operators submit tender bids was initially revealed at the weekend but has now been confirmed.
The need for a new regulation model comes after the Attorney General’s Office of the National Treasury (PGFN), a department within the Ministry of the Economy, claimed the authorisation model would be inviable.
“As demonstrated by the PGFN, only with the exploitation of the lottery modality under a concession model will the government be able to foresee penalties, in case of misconduct by the operating agents.
“This condition is seen as fundamental by the Secretariat, whose performance is dedicated to ensuring a high degree of professionalism for the development of activity in the country,” SECAP confirmed in a statement.
Under the proposed new model, licences issued will be valid for a period of nine years.
The limited number of licences estimate has not been confirmed but is based on the ‘Dixit-Stiglitz’ monopoly competition model designed by economists Avinash Dixit and Joseph Stiglitz in 1977.
Under the model, tenders will be held in periods of six months until the available licences have been filled, up to a period of four years after the first bidding process commences.
The concession process requires SECAP to first announce the invitation to tender publicly and then supply all received tenders to the Ministry of Economy.
These tenders will then be reduced to a limited number who will be subject to further scrutiny, with the final selected operators signing a concession contract with SECAP and the Ministry of Economy.
The new draft regulations make no reference to the initial licence fees or annual costs while the taxation applied to operators is also omitted.
The consultation closes on 6 March 2020.