Lula must respect the decision of the National Congress on the legalization of gambling

Luiz Inácio Lula da Silva (PT) was elected president of Brazil for the third time this Sunday (30). The PT had 50.90% of the valid votes in the second round of the 2022 elections. That means 60.30 million votes. President Jair Bolsonaro (PL) got 49.10% – or 58.18 million votes. The difference between Lula and Bolsonaro was only 1.80% – the smallest ever recorded in the presidential elections. In addition, since the country became eligible for reelection in 1998, it is the first time that a president in office has not won the election he is contesting. Lula’s election marks the left’s return to power.

In the last few hours, several BNLData subscribers asked the impact of this PT return to power and Lula’s reelection to the country’s gaming, betting and lottery market, as several important issues for the sector depend on actions by the Executive and the Legislative.

Sports betting

Law 13,756/18, which legalized fixed-odds betting or sports betting, depends on regulation by the Executive. The period provided for in the law for regulation expires on December 12 of this year and the sector is aware that a draft of the regulatory decree and the Provisional Measure, which creates the administrative penalties to be edited, already exists in the Civil House. Subsequently, it will be up to the Ministry of Economy to edit several ordinances to complement the set of regulations for the activity to operate in the country and not offshore.

The regulations were not edited in the pre-election period so as not to displease the conservative evangelical electorate of the Jair Bolsonaro government base at the request of an influential deputy pastor.

In this time interval, the National Consumer Secretariat – Senacon requested a copy of the advertising contracts of the 54 federations, clubs, CBF and TV Globo with the sports betting platforms. During this process, a dispute arose within the federal government for the regulation of the sport. The Ministry of Justice claimed regulation for its portfolio and the Minister of Economy, Paulo Guedes, did not resist.

15 days ago, BNLData revealed details of the negotiation for the regulation of sports betting, lotteries and commercial promotions to be transferred from the Ministry of Economy to the Ministry of Justice. Several meetings were held, including the exchange of documents to make the transfer possible, but which depended on the outcome of the elections. To achieve this, it would be necessary to confirm the re-election of President Jair Bolsonaro. The change would be made possible at the beginning of the new term, in January 2023, with the administrative reform.

The president’s defeat will generate many doubts and uncertainties in the betting market, lotteries and commercial promotions because nobody knows what will happen after the victory of Lula and the PT. Brazil will face 60 days of transition and we are not aware of the Executive’s willingness to make possible the change of ministry to regulate the sector and, even, to publish the rules to regulate sports betting. It would sound strange to transfer regulation two months before the end of the government. In addition, we will still have a World Cup in the middle of the road.

Sources from Palácio do Planalto heard by the BNL confirmed that the MP and the regulatory decree would be published after the elections, regardless of the results of the polls. But the prudent thing will be to wait for the next few days to know the impact of the defeat on the government and the president, mainly because Jair Bolsonaro is not a predictable representative.

Remembering that the government cannot fail to regulate a law, nor can it prevent the effects by failing to regulate it. But the regulation can be postponed to the next government.

Legalization of gaming by Congress

Another topic of interest to the sector is the vote in the Senate of PL 442/91, which legalizes casino, bingo, animal games and online games, which was approved by the Chamber of Deputies on February 25th.

Some sources revealed to BNLData that the president of the Senate, Senator Rodrigo Pacheco, is willing to appoint a rapporteur and decide on the procedure for the proposal shortly after the election this Sunday.

In fact, the Radar column ran in Veja this week the note ‘Gaming framework should be approved later this year’ and reveals that “Congress should approve – and Jair Bolsonaro sanction – this year the legal framework for gambling. The project is still in Parliament and has opposition from different parties, but it gained strength as an important revenue channel for the government, which will start January heavily indebted due to electoral spending this year. To give you an idea, parliamentarians who participated in the discussion of this proposal and defend the regulation of the game estimate at 150 billion reais the potential for collection of all activities that will be taxed with the approval of the legal framework.”

The information was confirmed by journalist Leandro Mazzini in his column in this week’s Isto É magazine. The note ‘Certain bet on sites and casinos’ informs “whether elected or not, Bolsonaro has already given the go-ahead to government officials to touch the agenda of gambling in the Senate, where the PL already approved in the Chamber advances, which releases bingos, casinos and the like.” . And why did you hold on? Fear of the reaction of evangelicals in the election. The regulation of online sports betting, for example, did not come about through the articulation of deputy Marco Feliciano (PL-SP), who led this blockade so that the boss would not lose votes. The draft regulation is ready at the sub-head of the Civil House of the Palace. The expectation is that the concession for each site operation will cost R$ 20 million”.

And Lula’s victory?

Before the first round, we commented that we had no guarantee that ex-President Lula would be the best option, but only certainty that the Jair Bolsonaro option would make it difficult to advance in the legalization and regulation of the sector in the coming years, mainly because the president had Pastor Silas Malafaia as a counselor, the commitment to the evangelical bench and to the conservatives of the refrain ‘God, homeland and family’.

The 2004 corruption scandal involving Waldomiro Diniz, a former advisor to the Minister of the Civil House, José Dirceu, accused of extorting money from entrepreneurs in the lottery sector, negatively affected the Workers’ Party. The legalization of games has become a cursed agenda for the party’s parliamentarians. During the 13 years of PT’s management, the sector suffered a period of promises and distrust, which generated a great setback for the gaming sector.

We do not know the ‘updated’ public opinion of Luiz Inácio Lula da Silva. The ex-president was once a firm believer in the legalization of gambling, even publicly manifested on several occasions in the 2002 campaign and at the beginning of the government in 2003, but after the Waldomiro Diniz scandal, Lula and the PT always avoided addressing the issue publicly. The environment improved in 2016, when the Ministry of Tourism, at the request of Palácio do Planalto, carried out an extensive survey to assess the impacts of the eventual release of casinos in Brazil and the possible models of exploitation of gambling.

After the approval of PL 442/91 in the plenary of the Chamber of Deputies, a high-ranking congressman from the PT and with direct dialogue with Lula, asked his opinion on the legalization of gambling and the former president promised to respect the decision of the National Congress and sanction the proposal that is approved by parliamentarians.

Prudence forces us to wait a few more days for a more mature reflection on the guidelines of the lottery, betting and gaming sector. After all, Brazil is not for amateurs and tomorrow everything can happen, including nothing.