Brazil Operators Risk One Foot In Grey Market If Sports Betting Legalised

November 28, 2022
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Although operators are anxious for President Jair Bolsonaro to sign the sports-betting regulatory decree, they are increasingly worried about what will happen to their online casino verticals should sports betting be launched before the larger gambling bill is also passed.

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Although operators are anxious for President Jair Bolsonaro to sign the sports-betting regulatory decree, they are increasingly worried about what will happen to their online casino verticals should sports betting be launched before the larger gambling bill is also passed.

Sports betting was approved by former president Michel Temer weeks before he left office in December 2018. At the time, the text stipulated that a regulatory decree should be issued by the government (from the President) within a period of two years, which could be extended up to another two years. That puts the deadline at the end of the day on December 12.

Meanwhile, a larger gambling bill that would also regulate online casino games has sat in the Senate since the end of February.

Questions remain about what these separate legislative processes mean if an operator is granted one of the sought-after licences for sports betting, but other online gaming is still a grey market. For instance, will operators have to shut down their online casino verticals to retain their sports-betting licence?

According to Udo Seckelmann, a gaming lawyer at Brazilian firm Bichara e Motta, the answer is complicated, but believes things are still looking good for operators who want to enter the market.

There is a possibility to register the sports-betting website, Seckelmann said, under a dot.br domain, which will have a link to a dot.com foreign site that offers other types of online gaming.

“I think the regulator would try to block this, but it’s a possibility because in legal terms, the entity that will hold the .br will be a Brazilian company. The .com would be held by another company, a foreign company that would still be exploiting the grey market.”

But Seckelmann is dubious that sports betting would go live without the larger gambling bill being passed as well.

Even after the sports regulatory decree is signed, there is a six-month window for operators to regulate and organise, and during that time they will still be allowed to operate in the grey market.

“I believe if we have a decree establishing the regulatory framework of sports betting then within six months we will have the approval by the Senate of the larger gambling bill. I think everything’s going to happen at the same time," Seckelman said.

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