Brazil’s sports betting roll-out to be delayed as government targets black market
Regulations to be postponed until H2 2020 amid late switch to concession-style licensing
The introduction of regulated sports betting in Brazil seems set to be delayed even further after media reports claimed the Brazilian government is now looking to change its regulatory model entirely.
Unconfirmed reports in Gaming Magazine Brazil suggest the National Secretariat for Public Policy, Planning, Energy and Lottery (SECAP), which is responsible for drafting regulatory standards, will hold off until the second half of 2020 instead of issuing them next month as previously scheduled.
The reason, sources close to the administration have said, is due to the current ‘authorisation’ system for licensing, a system which initially was expected to see as many as 150 licences issued to operators.
However, the Brazilian Ministry of the Economy’s in-house legal counsel (Procuradoria-Geral da Fazenda Nacional – PGFN) has raised concerns regarding the legality of potential fines issued against illegal operators and the imposition of licence fees under the current system.
A public consultation will be launched later this week on a simplified concession-style alternative licensing system, under which licences will be limited to a specific number of operators.
Under this model, the Brazilian government would issue an invitation to operators to bid for licences, with successful operators signing a contract with the government to operate in the market.
The number of licences has not been disclosed, however EGR understands this could be limited to between 50 and 60 sports betting licences.
In addition to switching the regulatory model, SECAP is expected to debut a shortened version of the draft decree on sports betting, taking into account the concerns raised by the PGFN.
This is the second time the Brazilian government has put its sports betting standards to public feedback, having previously held three previous consultations on proposed standards last year.
Neil Montgomery, founding and managing partner at Brazilian law firm Montgomery & Associados, said this was a “very surprising turn of events” and was contrary to SECAP’s previous public announcements on the regulations.
“If this decision is indeed confirmed as being official, it will be a step backwards since it would make more sense to regulate as many operators as possible.
“If the government indeed wishes to restrict the number of licences, then this may be a signal that it will want to enforce operators which have not obtained a licence,” Montgomery added.
The Brazilian government initially claimed it would look to publish regulatory standards by the end of 2019, aiming to fast-track the launch of the market, but has been forced to delay as it looks to finalise workable regulatory standards.