Political Power Player Lira Still Directing Brazil's Road To Regulation

March 4, 2024
Over the past year, the regulation of online betting in Brazil has taken several 11th-hour turns. Behind most of these machinations has been Arthur Lira, the current president of the Chamber of Deputies and arguably Brazil’s most powerful politician.

Over the past year, the regulation of online betting in Brazil has taken several 11th-hour turns. Behind most of these machinations has been Arthur Lira, the current president of the Chamber of Deputies and arguably Brazil’s most powerful politician.

Lira’s grip on political power in Brazil comes from the Centrão political bloc that he leads and which has accumulated more power in the past few years. 

With Lira presiding over the Congress’ lower house, none of President Luiz Inácio Lula Da Silva’s agenda can be passed without striking a deal with the deputy from Alagoas State in northeastern Brazil.  

Lira has played this trump card at least three times now when it comes to the regulation of sports betting and online casino games. 

On two occasions last year, Lira determined that a regulatory regime for online betting should be implemented via a regular bill instead of a so-called "provisional measure" emergency decree signed by Lula as administration officials had initially intended.   

Lira wanted to have more control over the legislative process, which a bill gave him because the Chamber of Deputies would be sure to have the final say, whereas a provisional measure may have been subject to final approval by Brazil’s Senate.

For Lula to push through other parts of his legislative agenda, he struck a deal with Lira last May and plans for a provisional measure were set aside until July. Lira then was able to stall congressional approval of that emergency measure in favour of moving forward through a regular bill, which the Chamber of Deputies ultimately passed in December.

Ultimately, Lira was the pivotal influence in ensuring that legislation initially limited to sports betting was expanded to include betting on other online games, with the chamber president able to secure passage of the expanded bill despite opposition from the Senate.

Although Congress’ role in approving online gambling legislation is over, Lira’s ability to influence the implementation of the regulated market in Brazil remains as strong as ever.

No more so than last month when all the plans set in motion by the presumed heir-apparent regulator José Francisco Manssur, the point man on gambling policy within Lula’s Ministry of Finance, were called into question as he was forced out of his position.

The main reasons for Manssur’s departure, according to anonymous industry sources, were Lira’s desire to have an ally in the role of Brazil’s chief betting regulator, as well as Manssur’s presumption to define several key terms within the law approved by Congress.

In particular, close attention was being given to how Manssur would interpret the clause of Article 7 of the law stipulating that all operators must have a “brasileiro” partner holding at least 20 percent of the legal entity’s share capital. 

Industry groups have been advocating for the establishment of a local subsidiary company to be adequate to meet the “Brasileiro” requirement, despite the apparent intention of lawmakers for that to mean a Brazilian investor.  

The newly-created betting secretariat with the Ministry of Finance last week published its first regulatory ordinance governing the registration of certification labs, but that ordinance will now have to come with a caveat: it was drafted by Manssur and his successor may look to make changes.

It remains unclear who will be appointed to the position the government’s legal advisor ultimately never attained: secretary of prizes and bets.

One international operator said that they were disappointed by Manssur’s departure from the government, given that he was a receptive listener to the industry. They noted that they were pleased that Simone Aparecida Vicentini, who worked under Manssur, was officially nominated as deputy secretary of the new secretariat, and will hopefully continue his work.   

André Fufuca, Brazil’s minister for sport, a close ally of Lira who last year lobbied for regulation of online betting to fall under the purview of his department rather than under the Ministry of Finance, reportedly played a role in the departure of Manssur and will now be involved in selecting the new secretary, according to a report last week in the Bastidor newspaper. 

Although Brazil’s finance minister will have to rely on support from Lira and Centrão to enact Lula’s economic agenda, he will still closely review whoever is recommended by Fufuca, according to Bastidor.

The new regulatory appointee may yet move forward with the dozen or so ordinances that Manssur had already drafted but not yet released without amending them, but there is no guarantee that whoever it is will not want to make their changes. 

Brazilians who work in the market joke that the unexpected departure was just another day in Brazil; as regulation moves forward, expecting more political influence from the Chamber of Deputies president is a safe bet.

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