Brazil Changes Tactics Again On Sports-Betting Legislation

May 19, 2023
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Implementation of a licensing regime for sports betting is now facing a more uncertain path through Brazil’s Congress after the government agreed not to legislate through an emergency decree that would take immediate effect.

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Implementation of a licensing regime for sports betting is now facing a more uncertain path through Brazil’s Congress after the government agreed not to legislate through an emergency decree that would take immediate effect.

The government of President Lula da Silva has bowed to pressure from Chamber of Deputies Speaker Arthur Lira and agreed to introduce its implementing legislation for sports betting as a regular bill with an urgency requirement, rather than as a so-called “medida provisória” emergency measure, according to reports by Brazilian publications Globo and Metrópoles on Wednesday (May 17) that have since been verified by VIXIO GamblingCompliance.

The development comes just one week after Brazil’s Ministry of Finance said that it had completed work on an emergency measure and a draft version of the legislation became public.

The Lula government is currently battling to secure congressional support for its wider policy agenda and the change of approach is understood to reflect those political dynamics, more so than the brighter focus now falling on sports betting due to a widening match-fixing scandal that has plunged Brazilian football into crisis.

In theory, the shift in tactics should not slow down implementation of a licensing and regulatory regime for sports betting.

Under parliamentary rules, an urgency bill must be considered by both houses of Congress within a period of 90 days, or 45 days for each chamber. A “medida provisória”, in contrast, takes effect immediately upon its publication by the President but must be approved by Congress within a period of 120 days or it will expire.

Still, treating sports-betting legislation as a regular bill rather than an emergency measure generally vests more power in both the Chamber of Deputies and Senate as the bill will be considered independently in each house rather than through a single joint commission made up of both deputies and senators.

There are also other technical differences, including the ability of lawmakers to establish new criminal penalties and create new government agencies through a bill, which is not constitutionally possible via an emergency measure.

“I think that this change shows the power that the Congress has currently in Brazil compared to the executive branch, and the importance of the industry having a dialogue not only with the regulator, but also the congressmen who will be involved with the bill,” said Luiz Felipe Maia, a Brazilian gambling law expert and founding partner of São Paulo-based law firm Maia Yoshiyasu.

Match-Fixing In Focus

One lawmaker in particular is expected to become an even more pivotal figure for Brazilian sports betting over the coming weeks.

Metrópoles reported that Lira will appoint Deputy Felipe Carreras to serve as the Chamber of Deputies’ rapporteur for the government’s sports-betting legislation once it is introduced in the lower house of Congress.

That will put Carreras in the box seat to shape the final bill because he will be able to redraft the legislation before submitting it to a vote in the Chamber, and then decide whether or not to recommend the adoption of any amendments later made in the Senate before the bill receives a final vote and is sent back to the desk of President Lula.

Carreras is by no means a novice on issues related to sports betting and gambling, having previously served as the rapporteur of a sweeping expanded gaming bill that was approved by the Chamber of Deputies last year and remains pending in the Senate.

The federal deputy from Pernambuco state in northeastern Brazil is also serving in the same role for a newly formed special parliamentary commission on match-fixing.

That commission was formally inaugurated on Wednesday to investigate allegations made by local prosecutors in Goias state that players involved in several games in the top two divisions of Brazilian football were paid to receive yellow cards or concede penalties.

The panel will hold a series of public meetings to hear from witnesses and is expected to conclude its work within a period of 120 days.

It is not entirely clear how the high-profile congressional investigation might conflate with a parallel approval process for sports-betting legislation, but it is a potential policy risk that will not have been diminished by the government’s change of approach.

The decision to pivot from an emergency measure to an urgency bill is unlikely to have been supported by officials in the Ministry of Finance who drafted the legislation, according to sources.

For one thing, the finance ministry is relying on sports betting as a new source of public revenue, noted Magnho José, a prominent blogger on Brazilian gambling and advocate for regulation.

Proceeding through a "medida provisória" that takes immediate effect would also have allowed officials to publish accompanying regulatory ordinances offering more specific rules in areas such as integrity monitoring and advertising.

“In the case of a [bill of law], it will be necessary to wait for approval in the Chamber and Senate,” Maghno wrote.

The change of approach is just the latest twist in what has already been an nearly four-and-a-half-year process to implement a federal sports-betting law that was enacted in December 2018.

Brazilian officials only recently decided to pursue an emergency measure on sports betting so they could make statutory changes to that 2018 law, rather than simply regulate by decree.

On Wednesday, finance minister Fernando Haddad again called for urgency in establishing a regulatory regime.

“In the case of sports betting, how can anyone be opposed? These are foreign sites making money doing what they do, by cheating,” Haddad said when testifying before a separate congressional committee. “We are going to regulate, to do the right thing.”

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