Brazil's Congress Kicks Off High-Stakes Betting Corruption Probe

May 22, 2023
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With legislation to regulate sports betting still not formally introduced, representatives of leading international operators are being called to testify as part of a high-profile congressional probe into match-fixing allegations that have rocked Brazilian football.

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With legislation to regulate sports betting still not formally introduced, representatives of leading international operators are being called to testify as part of a high-profile congressional probe into match-fixing allegations that have rocked Brazilian football.

A newly-formed special investigation commission (CPI) on betting integrity met for the first time in Brasilia last Wednesday (May 17), as members of Brazil’s Chamber of Deputies began their formal probe into the escalating allegations of spot-fixing in Brazilian football that were first brought to light in February by local prosecutors in Goias state.

At least eight players have already been suspended after they were alleged to have been bribed to give away penalties or receive yellow cards in various matches last year. Goias prosecutors have said they are moving on to a third phase in their investigation, which reportedly could involve more than 50 players in the top two divisions of Brazil’s soccer league.

The allegations emanating from Goias amount to “the biggest scandal in the history of Brazilian football,” according to Felipe Carreras, the federal deputy who will serve in the pivotal role as rapporteur of the CPI with responsibility for drafting the panel’s findings.

Carreras told the Folha de S. Paulo newspaper that one of the commission’s lines of inquiry will be why the Brazilian Football Confederation (CBF) was unable or unwilling to act in response to suspicious betting activity on games despite having an official integrity monitoring partnership with Sportradar.

On Friday, members of the CPI filed a series of resolutions to require a total of 26 individuals to appear before the commission to assist in its investigation.

Among those being called to testify are officials from the Goias Department of Justice, the presidents of implicated football clubs, as well as CBF president Ednaldo Rodrigues.

But also being called forward are Brazilian representatives of bet365, Flutter’s Betfair, Betano, Betsson, Sportradar, Parimatch, PixBet and other Brazil-facing operators and industry groups.

Under parliamentary rules, the CPI will have up to 120 days to complete its investigation and submit its report, which is likely to include various legislative recommendations to address match-fixing and betting-related corruption.

That time period could be extended, however, and the CPI’s broad powers to expand its investigation mean it is poised to leave an indelible mark on a Brazilian sports-betting market that remains on the cusp of regulation.

Brazil’s Ministry of Finance has recently prepared an emergency presidential decree to establish a licensing system for online betting, in accordance with a federal law first approved in December 2018.

Still, it seems inevitable that the final version of the regulation will be influenced, at least in part, by the high-profile work of the CPI, not least because any legislation will be subject to amendment and approval by Congress.

Carreras, the rapporteur of the commission, is also widely expected to assume the same role for forthcoming sports-betting legislation, making the lawmaker from Pernambuco state in northeastern Brazil a doubly influential figure.

Carreras told Folha de S. Paulo that lawmakers would ask the Ministry of Finance to move quickly “on the question of regulation of this activity.”

“The ideal thing is that this regulation already exists and is sent … to Congress so that, through the remit of the CPI, the law can be perfected in the Chamber [of Deptuies] and in the Senate,” he said.

Betting Restrictions On The Table

Although the scandal should, in theory, support the case for a regulated market, there is still concern over how the sports-betting industry will be perceived by lawmakers and Brazilian media as the CPI gets down to work.

“When it comes to the CPI, we know where it starts, but don’t know where it’s going to end,” cautioned one source who is closely following the regulatory process in Brazil. “This could be harmful to the market.”

One issue the commission will reportedly look into is whether Brazil’s regulations should prohibit any betting on negative outcomes such as corners, yellow cards or penalties, a restriction that one leading gambling lawyer immediately called a mistake.

Such a ban on specific bet types would “only serve to punish legitimate operators,” wrote Udo Seckelman of law firm Bichara e Motta Advogados on Twitter in response to reports of the CPI’s inquiry.

“The problem is not going to be in the licensed and regulated market, but in the unlicensed offshore market where fixers can act freely,” Seckelman said.

After its initial meeting of May 17 to select a chairman, vice-chair and confirm Carreras in the key role of rapporteur, the 68-member CPI resolved to hold its next meeting this Tuesday, May 23.

The probe comes amid wide-ranging reports that the government of President Lula da Silva has agreed with congressional leaders to abandon an original plan to propose legislation for sports betting in the guise of a so-called "medida provisória" presidential decree, and instead submit an urgency bill to Congress that will be similar in scope but ultimately grant Carreras and other lawmakers greater leeway to make changes to it.

That change of approach is understood to have met resistance in Brazil’s Ministry of Finance, however, and the original plan to regulate via a "medida provisória" had not been completely ruled out as of late last week.

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