Brazil Awaiting OK by President to Privatize Sports Betting Sector

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Seeking to cushion the impact of the COVID-19 pandemic, the Brazilian Ministry of Economy has proposed a plan to privatize the sports betting industry. The move awaits support from the country’s president, Jair Bolsonaro.

Brazil Wants to Privatize Sports Betting Operations

Sports betting businesses in Brazil will become the property of the state, a new plan outlines, with the project already enjoying the stamp of approval of Minister of Economy Paulo Guedes. Yet, to go through, the measure would need the backing of Jair Bolsonaro, the country’s right-wing populist president who believes COVID-19 is a hoax.

While Mr. Bolsonaro is skeptical about the biggest infectious disease outbreak in modern history, the impact of the novel coronavirus has had real, sizeable effects on the Brazilian economy, with GDP shrinking by 1.5% in the first quarter. Responding to economic factors, the Investment Partnerships Program or PPI will now seek to create additional jobs and try to offset the impact of the COIVD-19 pandemic.

The move was first approved by Minister Guedes on Friday, June 19 and has been published in the Official Gazette (DOU) effectively promulgating the law. As a result, sports betting may now become part of the National Privatization Program (PND), with the Ministry citing the need to “reorder the strategic position of the State in the economy.”

Strategic Reordering Doesn’t Mean Stepping Up to Responsibility

An interesting part of the document mentions that the State would be the main beneficiary of the sports betting business, but it would not carry any of the risks. That would lie solely with the license holders. The document specifically says that the government will be “free to act in an area of deep spending on technology and with a high innovation”.

The government will receive money from both tax and license fees. The most likely outcome is that Brazil will see a plethora of foreign operators enter the country in a bid to capture a share of the market, with other attempts to legalize gambling in the country already underway.

More importantly, Brazil will have to come up with a system that would protect the integrity of sports and implement a systematic monitoring system. Thankfully, there are many established services that can provide the country with what it needs to uphold high standards of integrity in sports contests.

All licenses will be granted by the Ministry of the Economy which will also serve as a regulator in the sector. The National Bank for Economic and Social Development on the other hand will set out the guideless based on which potential license holders would apply.

Brazil already has a good track record with the privatization of businesses, including the state’s lottery, Lotex. Lotex is operated by Consórcio Estrela Instantânea, a consortium formed with the help of International Game Technology (IGT).

Correction: A previous version of the article suggested that Mr. Bolsonaro is a left-wing populist. That was wrong. Mr. Bolsonaro is far-right populist. We are sorry.

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