Editorial: The Brazilian gaming and betting market is being born and consolidating itself out of a weariness of waiting.

With each passing day, and more than eight decades have passed, the number of applicants and prospective investors in legalized land-based gambling in Brazil decreases, while at the same time the number of investors and operators of legal gambling in our country increases. This conflict has been an active topic of conversation behind the scenes and within the Brazilian gambling market.

The days when the market eagerly awaited the legalization of gambling by the legislature are long gone. Despite the hope that Bill 2234/22 or Bill 442/91, which legalizes casinos in resorts, tourist and riverside establishments, bingo, the jogo do bicho (a type of lottery), and online gambling, would always be approved by players, the market and its stakeholders have grown tired of waiting and have moved on to investing in opportunities within the verticals that have already been legalized and regulated.

The legislative approach of legalizing gambling through a piecemeal approach has resulted in an incalculable diversion of billions that were ready to be invested in our country. Conversely, a large portion of these earmarked investments is now being applied to the legal market for sports betting, online gaming, and state and municipal lotteries.

The legalization of sports betting and online gaming, along with the legal security of state and municipal lotteries, has replaced the wait for a fully national and legal market. Meanwhile, supporters of the proposal currently being processed by the Senate's Constitution, Justice and Citizenship Committee are waiting to operate in Brazil.

Who loses and who wins?

First, we need to establish that "gambling" exists and has never ceased to exist in Brazil; it just wasn't 100% legalized.

No one doubts that the federal government and society will always be the biggest losers in an unregulated market due to the slow pace and lack of complete legalization. This statement should be reason enough for legalization, but decades of waiting confirm that it is not. The second biggest loser is the end consumer, whose range of options is limited and limited in the unregulated illegal market.

With the legalization of sports betting and online gaming, along with the expansion of state and municipal lotteries guaranteed by a ruling from the Supreme Federal Court, the market is born, and the long-awaited flame for comprehensive legislation to meet the demand of bettors is fading.

On the one hand, states and municipalities benefit, but the current market is not for everyone; for the most part, access is exclusive through concessions and limitations on supply. Ultimately, it is the end consumer who loses out due to a lack of diverse offerings in their regions.

The arrival of numerous national and international investors and manufacturers, including large North American and European gaming companies with shares traded on stock exchanges, confirms that the market has been born, and their investments reveal that the sector is growing. The current scenario of the gaming market in Brazil can be compared to a phrase by the American writer Vivian Greene: "We cannot stand still, waiting for the storm to pass, but rather, we must learn to dance in the rain."

Current market

The current market is experiencing rapid growth. In terms of revenue, sports betting and online gaming are breaking sales records every month. This didn't happen overnight; this sector benefited from the lack of regulation and taxation for years. A market was created, now established with low costs due to the absence of taxes. By ignoring the market, the government financed its development.

The state and municipal lottery market is perhaps currently the fastest-growing sector, but contrary to what was stated above, it does not offer the benefit of market maturation at zero cost. State and municipal lotteries regulated and established their taxes and transfers before any private sector operation began in their regions.

"The focus now is on conquering market share, not immediate profits," a senior executive from an international company stated. "The market still offers numerous opportunities and is undergoing significant development," he added.

In reality, consumers have been deprived of technology and legal offers for decades. After a period of adaptation, understanding, and maturation by the general public, the Brazilian market is and will be fantastic. "The biggest obstacle or paradigm at the moment is distinguishing between what is legal and illegal, or which operation offers legal security," commented the executive.

"Currently, the market for state and municipal lotteries in Brazil already represents one of the greatest opportunities in the world," a statement heard at a meeting of the Board of Directors of one of the five largest companies listed on the stock exchange.

As the market matures, little by little, the children who left are returning home. Large Brazilian companies are already in the study and product development phase for the state and municipal lottery sector.

Sure shot, wrong target.

The legislator's biggest mistake was believing in the investor's continued patience and hope, which has reached its limit. To think that investment is reserved, safeguarded, and dedicated to Brazil for more than a decade borders on the absurd.

The government was right when it finally legalized sports betting and online gaming, but starting from the 'roof' by legalizing part and not the whole, actually further strengthened the illegality of those that were left out. It wins half a dozen, loses more than a hundred. By legalizing part, it missed the mark and lost the 'favorable legislative timing' to legalize all the demand for games and betting available in Brazil.

The Supreme Federal Court has given states and municipalities the gift of confirmation of the legality of lottery modalities, as understood by several experts, removing the gray area from the activity and consequently attracting large investments, including international ones.

The market was born and is booming, and there's no going back. It's still for a select few, but more companies are entering the market every day, which is good for the sector and the country. Of course, the legalization of all verticals is still lacking.

The success of BiS SIGMA Americas, which starts this Tuesday (23), in São Paulo is a clear demonstration that the Brazilian games market is reaching its full potential, even with all the prejudiced and misguided discourse against the sector in the Legislature, this economic segment already employs thousands of Brazilians and is in a phase of recruitment and expansion. The event in São Paulo will occupy 20 square meters of the Transamérica Expo Center with the participation of 230 exhibitors and an expectation of exceeding the mark of 10 visitors over the three days.

In a few years, and with the adaptation of opportunities generated by the current legislation on games, betting, and lotteries in the country, the Legislative branch's actions will have no effect whatsoever, as the market will already be in operation and this step will be merely a symbolic act.