Sports betting in Brazil will be privatized by the country after the proposed decree by the Ministry of Economy was signed into law by President Jair Bolsonaro. According to the proposal, the sports betting sector will become part of the country’s Investment Partnership Program (PPI) portfolio.
The proposal for the privatization of the sports betting sector in the country came as a measure to partially offset the negative impact on the Brazil economy from the violent spread of the coronavirus. The country’s official economic data showed the economy shrank by 1.5% during the first quarter of the year, prompting the introduction of measures to stimulate businesses and create growth. One such measure is the PPI program aimed at creating additional jobs, which in June, added to its portfolio of BRL37 billion sports betting.
New Fixed-Odds Betting Public Lottery Service
According to the new law, sports betting will be launched as public lottery service under the name “fixed-odds betting” and its addition into the PPI program will help attract investment from the private sector. The process of privatization will be overseen by the National Bank for Economic and Social Development (BNDES) and the Ministry of Economy.
BNDES, under the new legislation, will be charged with the execution and monitoring of the privatization process, while the Ministry of Economy will bear the responsibility for coordinating and monitoring studies, projects, surveys or any other type of investigations deemed necessary for the proposed model of privatization to be effective.
Both the state-owned BNDES and the Ministry were also handed the task to develop and run the process for sports betting operators selection. The bidding process has a high chance of being similar to the one used to facilitate the sale of instant win lottery business, LOTEX, in October 2019.
Legalization Will Keep Funds In-House and Will Create Jobs
Prompted by industry data that Brazilians send abroad between BRL2 billion and BRL8 billion annually via offshore gambling websites due to sports betting being illegal in the country, Brazil authorities look to provide greater security for bettors, while creating new jobs and adding more income to the state coffers, besides preserving sporting integrity, a key component for regulation.
The late shift away from the qualitative approach approved in February will delay the launch of the sports betting framework, which was initially expected to be ready to go live before the end of 2020. Expectation now is that the legalization of wagering will be complete and will launch in 2021.