Brazil: What Will Happen To Sports Betting And The Deadline For Regulation That Jair Bolsonaro Failed To Meet?

Brazil: What Will Happen To Sports Betting And The Deadline For Regulation That Jair Bolsonaro Failed To Meet?

A 2018 decree, signed by then President Michel Temer, established that the regulatory framework for the operation of sports betting in Brazil was to be created within two years, with a maximum extension of another two years. This total lapse of four years expired today, December 12, 2022, and the regulation was not published by the outgoing president, Jair Bolsonaro. The Ministry of Economy assures that the issue “is still being studied by the Government”. But given the current situation… What is the impact of the lack of regulation?

Despite the silence from the State, experts in sports law say that the end of the deadline should have no repercussions either for bookmakers or for their customers.

Little to no change

“Today, international sports betting operators create products related to Brazilian sports and for local consumers to place their bets, but for all intents and purposes, it is as if they were doing a legal business or contracting with a foreign company. Therefore, the applicable legislation is the foreign one, and if there is no regulation, nothing changes,” said lawyer Luiz Marcondes, who is a professor of sports law and honorary president of Brazil’s Ibero-American Institute of Sports Law.

In any case, the market expects the regulation to bring transparency to the sector and an environment of legal certainty, currently non-existent; and bettors will also have access to legal coverage for their bets since today they are subject to the laws of the countries from which the aforementioned betting sites operate.

“The absence of regulation can lead to losses for all those involved in the segment. The government does not receive taxes, customers do not have a clear reference about reliable bookmakers, and operators do not have the legal security needed to scale their investment in national territory,” added Alexandre Fonseca, Betano’s country manager in Brazil.

According to Marcondes, the complexity of the issue, in an unclear political environment, may have contributed to the fact that the agenda did not advance in the regulation. And even with the relevance gained throughout the World Cup, the most optimistic hope is that social and legislative pressure can help break some barriers in the Executive Branch. “It is very clear that we are facing a super relevant social fact, which generates billions, so I imagine that it will soon be on the Government’s agenda”, said Marcondes.

No chances despite expectations

The chances of Jair Bolsonaro signing the text regulating the sector are considered null by more than one analyst. In June, during the electoral campaign, the evangelical bench in the Lower House managed to pressure Bolsonaro and shelve the Provisional Measure, since the religious argued that sports betting is a gateway to casinos and gambling, considered immoral. Bolsonaro, according to close associates, heeded this recommendation and left the case for a second term.

However, he was defeated by Lula Da Silva and apparently lost all interest in leaving to the president-elect the regulation of a sector that can raise at least R$ 6 billion a year (more than USD 1.144 billion).

For Andre Gelfi, partner and director of Betsson in Brazil, without the decree, companies will operate in legal uncertainty. Without a specific regulation, their operation will depend on judicial decisions, and it will be up to each judge to define each particular situation. In other words, legally, the business will become a patchwork of rules that will apply to some and not to others. “Nobody is going against the regulation. Part of the government wants it, the operators want it, and soccer also wants this security. Today we are big advertisers, and everyone is bringing this issue to light because they want legal certainty for the segment,” explained Gelfi.

What is certain is that if today the national authorities do not publish the decree regulating sports betting, they will be failing to comply with the original dates, since the deadline to regulate ends this Tuesday, December 13, the date on which the Law was published in the Official Gazette of the Union.

Law No. 13,756/2018 was sanctioned on the 12th, but published in the Official Gazette of the Union (DOU) on December 13. The text was not published in the edition of the Official Gazette of the Union this Monday (12), and there are only 24 hours left for the Palácio do Planalto to publish the regulatory decree, or carry out an official act extending the deadline.

The deadline provided for in item 3 of article 29 of Law No. 13,756/2018 highlights: “The Ministry of Finance shall regulate within a period of up to 2 (two) years, extendable for the same period, from the date of publication of this Law, the provisions of this article”, so legally the deadline ends on Tuesday, December 13, and not on Monday, December 12 as it was understood, since the Law was sanctioned on December 12, but published in the Official Gazette of the Union on December 13, 2018.

Yesterday, Sunday, the possibility of a new date was raised, due to rectification in the Official Gazette of December 19 of that year. The rectification was about the signature of the law: “On page 7, 1st column, in the signatures, read: Michel Temer, Eduardo Refinetti Guardia, Esteves Pedro Colnago Junior, Cláudia Maria Mendes de Almeida Pedrozo, Leandro Cruz Fróes da Silva, Gustavo do Vale Rocha and Raul Jungmann”. In order for a change in the date of regulation to be admitted, it would be necessary to modify an article, as provided for in Decree-Law 4,657 of September 4, 1942, which deals with the Law of Introduction to the Rules of Brazilian Law.

Thus, only the article in question would change its term and would be effective as from the new publication.