A dispute is being propagated between the lower house of the Brazilian Congress and the Ministry of Finance to decide the best route to regulate the South American giant’s sports-betting industry.

This disagreement has come in light of the failed plans to push through an emergency measure that would have seen the government able to receive tax revenue from the sizeable grey industry capitalising on the Brazilian sports-betting market.

Proposed by the Ministry of Finance this provisional measure, despite being subject to congressional approval, would have been the most immediate effect, affording officials in Brazil the ability to legalise and regulate sports-betting.

However, President Lula’s advisors are understood to have dissuaded him away from the bill as Chamber of Deputies speaker Arthur Lira was against the measure and acting out of a position where he does not hold a significant house majority, the President declined to sign the emergency plan.

The lack of influence President Lula now has over the Brazilian Congress is on full display as of late, with Lira and the lower congressional house exerting its own powers to slow the legalisation of sports-betting, opting for the longer more deliberated process of filing the legalisation as a regular legislative bill.

This situation’s complexity has been further aggravated by the revelation of a series of high-profile, match-fixing allegations which have had such vast consequences, even implicating players from US Major League Soccer.

The Brazilian Congress has in response to this scandal, launched a parliamentary investigation commission (CPI) which is due to present its results to the chamber in September at the earliest.

In relation to this CPI, Brazil’s Superior Court of Justice has handed down punishments for 7 players for illicitly receiving bribery payments to fulfil various match outcomes, such as bookings or penalties.

This investigation, though entirely necessary, will inevitably slow the progress towards any form of federal sports-betting legislation as the findings from the CPI will be of immense importance to lawmakers when deciding the regulatory framework to implement.

Further political turmoil could yet cause the situation to become even more problematic as Deputy Bacelar from the northerly state of Bahia, has summited a summons to former President Bolsonaro’s economy minister, Paolo Guedes.

This is over a similar retrospective dispute, regarding the delay in regulated sports-betting, an evidently storied subject for the Brazilian legislature.

In accordance with a December 2018 law, the finance ministry was required, as a matter of fact, to have introduced fixed-odds betting within a 4-year window, which expired at the end of Bolsonaro’s Presidential term to no avail.

Bacelar wishes to investigate why this did not occur, strongly implying a likelihood of foul play.

Additionally, Brazilian gaming lawyer Luiz Felipe Maia, founding partner at Maia Yoshiyasu, has explained how these issues will not only individually but collectively cause even further stagnation:

If they don’t negotiate properly with Congress before publishing the provisional measure then Congress may reject it just by saying, ‘Okay, this regulation is pending for over four years. Why is it so urgent right now?’

Due to all of these pending, time-absorbing issues and a lack of cooperation, a regulatory bill seems to be the most likely course of action to be taken later rather than sooner, with the conclusion of the CPI into sporting corruption appearing to be the most likely catalyst for progression, however, this is by no means a guarantee.

Regardless of when federal consensus is reached, Sports-betting’s delay could also spell another issue going forward, as on a state level, legalisation has been making far greater strides with the recent issuance of a relevant licence inaugurating the state-wide industry in Rio de Janeiro. The states of Paraná and Paraíba are also due to follow suit.

Should poor legislative planning lead these licences to become incongruous with the eventual federal legislation, a financial catastrophe could be on the government’s hands.

Many regulators could perhaps choose to forgo legal registration in favour of continuing to operate in the still dominant grey market for the most part, having already applied for a licence on a state level for instance.

This would defeat the most important purpose of this regulatory movement meaning the government will continue to miss out on the billions of dollars being lost in revenue derived from taxation.

SiGMA Americas

The SiGMA Americas-Brazilian iGaming Summit is just 1 week away. Don’t miss out on the wealth of industry knowledge or the plethora or premium networking opportunities gracing the vivacious shores of S?o Paulo, Brazil on the 14 – 18 June.