Technology and regulation: details on how the government will monitor betting.
The Special Advisor to the Ministry of Finance, José Francisco Manssur, was interviewed by journalists Marcelo Hazan and PVC on the "De Primeira" program on UOL Esporte, discussing the regulation of sports betting sites. He commented that the focus shouldn't be on prohibition, but on technology, oversight, intelligence, and effective methods. ( Watch here )
Provisional Measure
"The Provisional Measure establishes general regulations. It classifies companies offering betting services to consumers that are not accredited as engaging in an illegal activity, an illicit act. And it gives us all the tools to monitor: it allows the Federal Government to use the State's structure to oversee everything negative about betting."
Ordinance on handling
"Based on the Provisional Measure, we will issue a Decree on match-fixing, a specific Decree on match-fixing. We are submitting a decree to the president, forming an interministerial group—Ministries of Finance, Justice, and Sports—with representatives from civil society—the Brazilian Bar Association (OAB), the Attorney General's Office (AGU), the Comptroller General's Office (CGU), the Brazilian Institute of Sports Law, the Brazilian Olympic Committee (COB), the Brazilian Football Confederation (CBF), the Paralympic Committee, and representatives of the operators [betting houses]—to bring together the most modern approaches in the world to combat match-fixing. I believe this is one of the most serious crises, if not the most serious, that football has ever faced in terms of the credibility of the product; we have never faced such a serious crisis."
Monitoring systems
“We are looking at the most modern and efficient methods in the world to arrive at the ideal text. I strongly believe in technology, intelligence, systems, and teamwork for monitoring. The starting point is to compare the betting curve with the behavior curve of each athlete, in real time, using artificial intelligence, using the systems we have today. If you notice that a player is eventually behaving suspiciously, whether off or even on the field, and you compare this behavior outside the curve—because it alone cannot be indicative—but you notice that there was R$1 million in bets on that corner kick, you raise a red flag that even gives the government the power to communicate with the operators and say: 'Remove the game from the card, the card is under suspicion.'”
Fee of R$ 30 million
“There will be a concession fee of R$ 30 million for each company, which will be defined in the Ordinance. This money is specifically for use in technology and systems, to set up, within the Ministry of Finance, along with the Ministries of Sport and Justice, a highly technological system capable of monitoring behavior. What we don't have today is a wild environment. Based on monitoring, we will try to implement preventative measures; anything that escapes preventative action will be a matter for the police authority, which is already doing so. There are already important investigations in Goiás, important actions by the Federal Police, but we want to work on preventative measures.”
How will the regulation work?
“Once the regulations are ready, there will be a period for betting companies to become accredited by paying a license fee, submitting documents, establishing headquarters in Brazil, hiring employees, having minimum capital, and a payment method approved by the Central Bank. We will give a reasonable period of 180 days, starting from the Ordinance that comes after the Provisional Measure. From then on, anyone who is not accredited is practicing an illegal activity in Brazil, namely, offering bets to consumers without being accredited. And those who are operating illegally cannot be on any team's jersey.”
On the show "De Primeira," José Francisco Manssur also discussed how advertising by betting companies will be regulated, stating that it's necessary to separate "the wheat from the chaff" through oversight and punishment. Check it out below.
Proposal from the Federal Government
“The Federal Government, this government, is addressing an omission, because the law that allowed betting dates from 2018, giving the previous government two years to regulate it, extendable for another two years, and in four years nothing was done. There is already a draft discussed with Ministries, discussed with operators [betting houses], with sports entities, CBF, clubs, COB, various segments of society so that we can arrive at the Provisional Measure. It is awaiting the internal procedures that the law determines, passing through six ministries, passing through the Civil House, being signed by the president and going to Congress.”
Late regulation
“There will never be zero chance, but we would have many more ways to prevent manipulation [if it had already been regulated]. Without regulation, there's no way to create the ordinances; the manipulation system was very predictable—if there's betting and money involved, there's manipulation. Of course, we could have much more advanced prevention systems if we had regulated it within the timeframe the law itself allowed; it's impossible to deny that fact.”
'I don't believe in bans'
“I strongly believe in technology, I don't believe in outright prohibition, in the peace of the cemetery; people will continue doing it clandestinely and without contributing to the government's revenue. The government wants to collect revenue to meet the needs of health, education, housing, sanitation, what it has to provide for the population. It's not fair that all sectors generate taxes and this one doesn't. But a healthy revenue stream, one that doesn't kill the system.”
'Investigate and punish'
“It’s very bad for the product if we stigmatize athletes as fraudsters. The athlete is the one who fights their whole life; the fraudster is the one who allows themselves to be corrupted. They are the minority; otherwise, we will kill the product. If we assume that everyone is cheating, we kill the sport, and that’s not what we want. We want to investigate those who become corrupt to keep the system clean. It’s necessary to say that the players and operators [betting houses] are not corrupt; the corrupt ones are the fraudsters. Some are doing it, a minority; we will investigate and punish them.”
Advertising regulation
“We need to analyze the regulation of advertising, which today is done without any regulation, at any time. We will issue warnings to children and adults and combat money laundering, which is fundamental; the government is very concerned and wants to address it. We will also prohibit advertising by those operating illegally in the media, because these are public concessions. Those who are not legal will not be able to advertise on radio, TV, and the internet. I am very clear about this, especially because I come from football, I participated in the drafting of the SAF law, I have experience in clubs and leagues, so I know how fundamental this sponsorship is for the sport today. We will not cut off betting; I don't believe in prohibition. If you remove it from the shirt, you kill the segment, and people will continue betting. What we want is to bring these companies into the regulated system so that they can continue operating.”
Market expansion
“The American market isn't in Brazil because they're all listed on the stock exchange, and the exchange doesn't allow them to operate in an unregulated market like Brazil. With this new regulation, more players will enter the market, and clubs will have more sponsorship opportunities. We have studies showing that betting companies spend R$3 billion on advertising, which demonstrates that advertising is fundamental to this market; to reach the consumer, you need to advertise. Prohibiting illegal activity will bring it into the system; it's a very good product, nobody advertises on a football team's shirt for no reason.”
'Separating the wheat from the chaff'
“Today, if you place a bet, you receive a payment minutes later. All these methods, for those who are not accredited, will be limited by the Central Bank. The person will have to open an account outside the platform, and there's the possibility of the Government shutting down websites once they're operating illegally. We can separate the wheat from the chaff; I don't believe in prohibition, it's about investing in technology, oversight, intelligence, and methodology.”
Learning with bingo
“Regarding bingo, the experience of what went wrong serves as a guide for us to correct. And that's the fundamental point: bingo halls aimed to collect public revenue, but here we are in a market where the club has much more to gain from the relationship between the club and sponsorship. Bingo halls relied on transferring revenue to the public sector and to the clubs; and here, we have the capacity to better oversee and ensure that this market establishes itself in a safe and responsible manner so that the sponsorship market grows. The club's prime asset is maintaining a sustainable market, so that more operators enter Brazil. You create a market that stands on its own, and this market generates more wealth.”
'It's a fundamental recipe'
“The market comes in many sizes. There's the city's betting company, accredited in Brazil, that will seek out teams in the Série C. From Série A and B, 39 out of 40 clubs have sponsorship. In Série C and D, almost 80% have market sponsorship. In other words, the club is fundamental for the market, and for the clubs, it's a fundamental source of revenue for Brazilian football as a whole.”
Ban specific types of bets?
“We created the Working Group, with government and civil society bodies, and we will listen. At this moment, I think that prohibiting cards, corner kicks, is not a solution, because the player will look elsewhere for places to bet, but if the Working Group is convinced that this is an emergency solution, we are open to dialogue. My personal position is not to prohibit, but I am open to discussion. I'm not going to create a Working Group to support someone's position; it's to listen, receive studies, documents, see what is being done abroad. If it is shown beyond a shadow of a doubt that at this moment it is worthwhile to restrict some modalities, I am open to dialogue.”
Deadline for the Provisional Measure
“I am an employee of the Ministry of Finance and I don't give deadlines to the President of the Republic, who received 60 million votes and will sign whenever he sees fit. The people put him there and it is up to us, the employees of the ministries, to do our job. The president will know the right time to sign, but we have already delivered the draft and are working on the Ordinances. After it is signed, the Provisional Measure will be submitted to Congress, with a lot of autonomy, it will have a rapporteur, they can debate, modify, we are available to talk. There is also Parliament, which is elected by the people and deserves all respect.” ( UOL Esporte )
