Introduction: Off to a flyer
Part 1: Setting the scene
Hopes are high that
Brazil’s new government
will pick up where the
previous one left off and
implement a sensible
regulatory regime for the
sports betting legislation
signed into law last year
The basic statistics
Population 211 million (2018)
GDP $1.93trn (9th highest
globally)
GDP per
capita $9,160 (75th highest
globally)
Source: IBGE, World Bank
It was departing Brazilian President
Michel Temer who set the ball in
motion on the regulation of both
online and retail sports betting
as an approved lottery game in
the country.
Reform bill PM 846, signed by
Temer in December last year and
then becoming Law 13,756/2018,
set up a two-year period during
which the Ministry of Finance, now
under the instruction of the new
government of Jair Bolsonaro,
would look into how it wishes to
best implement a new system of
oversight of sports betting.
It’s an enticing prospect.
According to the leisure and
gaming analyst team at Morgan
Stanley, the market could be
worth up to £1.1bn within five
years as a base case and up to
£1.6bn in a more optimistic scenario.
Much will depend on how the
government chooses to regulate.
The new bill certainly marks a
step forward from the current
situation, where the only explicitly
regulated gaming comes via the
lottery, which is run by the Caixa
Econômica Federal Bank under
the supervision of the Ministry of
Finance, and legal horse racing.
The size of the offshore market
is up for debate. According to
a 2017 report from the Brazilian
Legal Gaming Institute (Instituto
Jogo Legal) the illegal gambling
market (i.e., not just online) was
worth up to $6.4bn in gross
gaming revenue (GGR) terms,
while a report commissioned by
the Remote Gaming Association
(RGA) and conducted by KPMG
in late 2017 estimated offshore
online GGR to be worth $2.1bn
(£1.6bn) annually.
At least in terms of sports betting,
the Brazilian government would
appear to have reached a similar
conclusion to KPMG, namely that
“a combination of responsible
gambling measures, sensible and
effective licensing requirements,
and a workable taxation regime
based on GGR would bring
about the best possible outcome
for all.
“Importantly it would also
significantly reduce the size of the
unregulated market which puts
consumers at risk and operates
beyond the reach of the Brazilian tax
and legal authorities,” stated KPMG.
Horse racing
offerings in Brazil
Although horse racing doesn’t have
a huge footprint in Brazil, there
are three official offerings. One is
Suaposta, operated by Club do Rio
Grande do Sul in conjunction with
the Spanish gaming giant Codere.
French tote operator PMU also
works in the country with the Jockey
Club Brasileiro, while the Jockey
Club de Sāo Paulo operates the
website WebTurfe.
BRAZIL The regulated opportunity in Latam’s largest market
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