Global Lottery Monitoring System (GLMS) President Ludovico Calvi took time out at last week’s Betting on Sports conference in London to update SBC about progress in Brazil as it seeks to create a legal framework for sports betting.
Calvi, who has been instrumental in formulating the foundations of the nascent framework, told us: “Yes we’ve been supporting the Ministry of Finance in Brazil. It’s been a long and winding road. There is now a decree – a law. And we can say that whatever is in the law is pretty innovative when we see what other jurisdictions have been doing.”
One key element contained in the law, he suggested, is the fact that 99% of money wagered will be retained by the operators. “And 1% of tax on turnover is to be given back to the state to pay for all sorts of services,” he said. “Operators will be able to buy an authorization,not a concession, to operate sports betting on mobile or physical locations.”
Calvi proceeded to reveal that operators will pay about US$0.7m for nine years. They will subsequently need to pay a fee on a monthly basis which will be US$7,225 for physical locations per month and US$9,742 on digital channels per month. The monthly figure rises to just over US$12,000 for combined mobile and physical authorization.
On top of that, he advised, there is a provision for a bank guarantee of about US$1.5m to ensure operators have sufficient security to pay winnings in case things go wrong. “This way we know that Brazilian authorized operators will be able to guarantee winnings,” said Calvi.
“This creates a situation where consumers will be happy to place bets with authorized operators. The law is focused on bringing into the light black market or unregulated operators who are willing today to be regulated and to get an authorization.”
Looking at how the law will apply to the potentially huge Brazilian market, Calvi noted: “There is a predominance on the north eastern side of retail based betting while the south east is more digital and mobile.
“I strongly believe that the market, if the conditions are right, can be very innovative as a regulatory framework and can set the base as best practice for other South American and Central American regulatory frameworks. It could even be a potential example for the US states that are in the process of regulating post-PASPA.”
As for the market’s future worth, Calvi predicted: “I think everything is there for Brazil to regulate effectively as long as there are sustainable commercial, fiscal, operational conditions. I think the market would really deliver and could be worth in two or three years something like US$17bn turnover and about US$3.5bn in GGR.”