Resignation of top official casts uncertainty over Brazil's regulation timeline

The regulation of Brazil’s sports betting market could be subject to further delays following the resignation of key ministry official Alexander Manoel, EGR Intel has learned.

Manoel, the head of the body in charge of rolling out fixed-odds sports betting legislation in the South American country, will leave his post in March.

Sources close to the government have confirmed that Manoel will depart as head of the secretariat of evaluation, planning, energy and lottery (SECAP), having submitted his letter of resignation at the turn of the year.

Manoel is one of two officials spearheading the Brazilian government’s fixed-odds sports betting efforts, working extensively with Undersecretary of prizes and raffles of the Ministry of Economy, Waldir Eustáquio Marques Júnior.

Manoel will continue in his current role until he is transferred to another department within the Brazilian Ministry of the Economy.

EGR has learned there will also be no Brazilian government representatives attending ICE 2020 next month as a result.

SECAP operates as a sub-department of the Brazilian Ministry of the Economy, working under Brazilian Finance Minister Paulo Guedes. It has responsibility for five separate government departments including the subcommittee of prizes and raffles.

Earlier this month, the Brazilian government claimed it was targeting a March roll-out of its final sports betting regulations, having spent the last year finalising the proposed standards.

However, it is understood that the final version of the legislation has been passed by SECAP to departments including the Ministry of Justice and the Civil House (Casa Civil) for scrutiny, before it can be signed into law by President Jair Bolsonaro.

This process could see the finalised decree amended again, potentially delaying the roll-out of final regulations and the eventual Brazilian market even further.

Neil Montgomery, founding and managing partner at Brazilian law firm Montgomery & Associados, said international operators have been waiting on gambling legalisation in Brazil for years, but have been frustrated on several occasions.

“Saying that regulations will be issued only in March 2020 may be looked upon as yet another blow to the timeline and as a bit of an anti-climax to the momentum that had been in motion towards the end of 2019,” said Montgomery.

According to Montgomery, sports betting operations can start no sooner than six months after the final regulations are published.

Brazilian authorities initially called for a two-year timescale for any sports betting launch when bill 13,756/2018 was first passed in December 2018, working to a market roll-out deadline of December 2020.

However, there have been issues during the consultation process, most notably in December when a proposed SECAP-led reduction in the expected turnover tax payable by operators was overruled on legal grounds.

SECAP had argued for a reduction in the 3% turnover tax initially put forward to 1%, but no such reduction could be made as it would contravene Brazilian law.