Brazil’s President Okays the Privatization of Sports Betting

The gambling industry in Brazil has taken a significant stride forward after President Jair Bolsonaro officially authorized the privatization of sports betting in the country. Brazil’s head of state signed the Decree No. 10,467 on Tuesday, a declaration that gives the Ministry of Economy and the National Bank for Social and Development (BNDES) the mandate to steer the country to a regulated sports betting market. The two parties have been assigned the management and implementation of the sports betting legislation that was signed into law by Michel Temer, Brazil’s former president back in December 2018.

Brazil’s Sports Betting is Under the Flagship PPI Portfolio

According to the newly signed decree, Brazil’s sports betting sector will now be under the portfolio of Brazil’s Investment Partnership Program (PPI). Through the PPI, private operators will be permitted to start offering wagering options to local betting fans.

This new measure is one of the strategies that the Brazilian government has employed in a bid to offset the negative impact that the Coronavirus pandemic has had on the country’s economy. Based on Brazil’s official economic report, the economy slid by 1.5% during Q1 2020 owing to the uncontrollable spread of COVID-19.

The overall PPI flagship program was first introduced in 2016 when Brazil faced its most recent financial crisis. Its function was to identify public policy directives and state-owned assets that could attract financing from the private sector to assist in funding federal infrastructure projects.

According to Martha Seillier, PPI’s Special Secretary, the portfolio of the PPI scheme currently includes 158 projects spanning over 13 different policy areas whose privatization has been okayed. The divestment of LOTEX, the state-owned instant-win operator in 2019 was part of this PPI objective.

How Will the Privatization of Sports Betting Work?

Based on the law that was recently signed by the president, sports betting in Brazil will be rolled out as part of the public lottery services under a “fixed-odds betting” label.

The Ministry of Economy will be in charge of coordination and monitoring of the privatization process plus the approval of investigations, surveys, projects, or studies that may be deemed necessary for the success of sports betting undertaking. The BNDES on the other hand is tasked with execution and oversight of the privatization process and will be submitting regular status updates of the privatization endeavor to relevant organizations such as the Investment Alliances Program of the Presidency of the Republic.

Additionally, the Ministry and the state-owned BNDES were also commissioned with the duty of developing and running the process of selecting sports betting operators interested in the Brazilian market. Industry observers reckon that the process that will be followed here could be the same as the one that was used when LOTEX was under sale in 2019.

Regulated Sports Betting Debut in Brazil Edges Closer

The regulatory framework that will guide sports betting in the country will be drawn by the Secretary of Public Policy, Planning, Energy and Planning (SECAP), which is a division of the Ministry of Economy. Earlier in the year, SECAP announced that it would be authorizing a maximum of 30 betting licenses, which is about half of what it had initially suggested would be ideal for the country’s regulated market.

According to industry statistics, Brazilians spend up to over $1.4 billion on offshore gambling websites each year because regulated sports betting isn’t available yet. By establishing a regulated market in the country, the pertinent authorities are aiming at keeping the bettors’ expenditure in-house, so that the practice can drive more funding to state coffers.

Through sports betting regulation, the integrity of sports will also be preserved, and bettors will get an assurance of tighter security whenever they bet online on locally licensed platforms. Owing to the historically sluggish pace that the country has been on, it is highly unlikely that sports betting will go live by the end of this year. However, even though no launch window or date has been announced by the relevant authorities, from the look of things, Brazil’s legal sports betting market could debut somewhere in 2021.