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A forthcoming emergency decree to regulate sports betting will reportedly prohibit all advertising and sponsorship by unlicensed operators unwilling to pay an anticipated multi-million real upfront licensing fee.
Among other details, Brazilian news publication UOL reported on Tuesday (March 14) that a forthcoming medida provisoria, or presidential emergency measure, to regulate sports wagering will include a ban on advertising for operators that do not have a sports-betting licence.
This answers one lingering question of how the government plans to regulate a grey sports-betting market that has grown so large and profitable that the industry became concerned that it was beyond control.
How to channel the existing grey market into a legal regime is expected to be an even more pressing policy matter if a prohibitively expensive upfront licensing fee – reported by UOL and other publications to be as high as R$30m (US$5.6m) for a five-year licence – remains the same in the final version of the emergency measure once approved by Brazil's Congress.
With a higher cost of market entry, the government would need to make it hurt for at least larger operators with established brands in Brazil to remain unlicensed. For smaller operators, however, the grey market may remain an appealing option without further deterrence.
A ban on advertising by unlicensed operators would not be a surprise as it was proposed in a draft regulatory decree leaked last year, which also included proposed provisions for the Central Bank of Brazil to facilitate blocking of payments involving unlicensed sites.
“It was already expected in the last version,” said Luiz Felipe Maia, a Brazilian gambling law expert with the firm of Maia Yoshiyasu. “It’s a start, but it’s not enough.”
Many large sports-betting operators already have sponsorship deals with Brazilian football clubs, which would likely also be covered in the advertising ban.
As a result, operators such as Flutter's Betfair (partnered with Palmeiras), Galera.bet (partnered with Corinthians), Estrela.bet (partnered with America) and Parimatch (partnered with Botafogo) would all need licences if they wish to see their names continue to appear on their teams’ jerseys.
The issue will come to a head soon, as Brazil finance minister Fernando Haddad revealed in an interview on Tuesday (March 14) that the emergency measure to regulate the sports-betting industry will be published after President Luiz Inácio Lula da Silva returns from his trip to China. According to his schedule, Lula is due to make the trip back from Shanghai on March 31 after four days in China.
In another sign of imminent action to regulate sports betting, two new industry associations were both launched on Wednesday (March 15) to represent the interests of operators as the market transitions from grey to regulated.
A group of nine operators, including Flutter, Entain, bet365, Betsson and Brazilian fantasy sports operator Rei do Pitaco, announced the launch of the Brazilian Institute for Responsible Gaming.
Also launched on Wednesday was the National Association of Gaming and Lotteries, reportedly led by local representatives of Caesars and Betano.
The new associations come one week after the formation of Brazil's first sports integrity association by Rei do Pitaco, Entain and Genius Sports.
For more analysis of Brazil's forthcoming measure to regulate sports betting, see VIXIO's Latin America Outlook - March 2023.
