Ricardo de Paula Feijó - a lawyer specializing in public law with regulatory expertise - analyzes the current and future condition of the gambling market in Brazil in an exclusive interview with iGaming Cafè.
The gambling industry is constantly evolving and expanding! This market, as demonstrated in recent years, is constantly looking for new territories in which to operate and offer products and/or services.
Among the main and new absolute objectives for Industry, we certainly find LATAM with its huge population basin and jurisdictions.
Chile, Peru, Colombia, and in particular Brazil have fascinated most companies and delegates for some time by creating a real "media boom" around these locations. The growth in attention has not only involved Gambling companies, in fact, many governments have also begun to work to change or increase gambling regulations.
Ultimately, before proposing to new customers or users belonging to these territories, it becomes necessary for providers to know the areas and start delicate operations that in reality, only a few companies are able to implement.
To better understand the "behind the scenes" of gambling development in LATAM, we decided to reach out and interview Ricardo de Paula Feijó - an expert lawyer who will talk to us about the situation and the growth prospects for the industry in Brazil.
Here is our interview:
- Hello Mr. Ricardo de Paula Feijó, nice to meet you! You are a gambling law expert and have been studying the European market for some time. For those who do not know you yet, can you provide more details about your role and your path over the years?
Hello. It is a pleasure to participate in this interview and talk a little about the exciting moment we are living in Brazil.
I am a lawyer specializing in public law and have been working for the last 10 years advising companies in regulated markets, such as highways, airports, and laboratories, among others.
I also have accompanied the gaming regulations in Brazil and have been working with clients from that area since 2016.
Between 2019 and 2021, I did my LLM with a special focus on gaming law, and in 2021 I published a book about gaming law and its regulation in Brazil. Lastly, I co-founded the website Aposta Hub Brazil, which is dedicated to publishing useful information to everyone who wants to play in Brazil.
- How and when was this study born and what is its goal?
The first time I began studying gaming law was to help the federal government to license instant lotteries in Brazil. After that, I realized gaming law is scarcely studied in Brazil and so I started my studies in that area. The result was my book “Regulação dos Jogos de Azar e das Loterias no Brasil - perspectivas para o futuro” published in 2021.
- The gambling market in Brazil: licenses, regulations and product compliance: could you give us a general overview of how things stand in that area? What is the current situation like and what guidelines does your company follow to operate?
Currently, the federal lottery is operated exclusively by Caixa Economica Federal, which is a federal bank.
The regulation of sports betting is still been developed, but the expectation is to have it done before the end of the first semester of this year.
On the other hand, state lotteries have been authorized by the Brazilian Supreme Court in 2020 and are on the verge to begin their activities. The regulation changes intensively from each state. Some states have a model that allows everyone that accomplishes some requirements to operate a state lottery. That will create a competitive and strong market.
The product compliance required from the operators also varies from each state. In most cases, it has been mandatory to obtain international certifications that assure the safety and quality of the products. The operators also need to have a compliance program, also certified, to guarantee that regulations are observed.
- At a recent conference you said: "There are many investment and business creation opportunities that can be exploited." Could you tell us what are the main guidelines to follow and which are the segments of greatest thrust?
The two main segments that can be exploited at the moment are sports betting and state lottery. Those are the segments that are been regulated and are growing the most.
For that purpose, the main guidelines are to understand how those markets work and are regulated in Brazil and what are the requirements to be able to invest and seize this opportunity. Much of the regulation is still been developed, but now is the best time to begin looking at the Brazilian market.
- Brazil has always been the "home of lotteries". How is this market regulated and what is expected for the future?
The Federal Lottery is operated by Caixa Economica Federal, which is a public bank. It is the main lottery in Brazil since the state lotteries were prohibited in 1967, with some exceptions.
Since 2020, state lotteries have been authorized to be reinstated and some states are on this path, but regulations are still in progress. The most advanced case is of the state of Maranhao. Every five years, the state opens for any company interested to require a license to operate lottery and sports betting in the state. The companies have to prove they have technical and financial capacity to do so. If they do and pay a grant of 1.5 million Reais, they are granted a license for 20 years.
- The gambling market in Europe is mainly driven by sports betting; also in Brazil, this trend is starting to consolidate. What are the current conditions for operating and what are the regulatory processes currently in place?
Brazil has a particularity that sports betting is considered a species of lottery and is subject to the same regulation.
Sports betting regulations are still been developed and are expected to be delivered by the end of the first semester. So, the regulatory processes have not begun yet.
In-state level, some states are authorizing companies to operate sports betting, such as the state of Maranhao that we just mentioned.
- Speaking of both online and land-based casinos, what is authorized and what is planned for the next few years?
Online and land-based casinos are not allowed in Brazil. There is a new bill being discussed in the congress that has already been approved in the house of representatives and is going to be voted in the Brazilian Senate that authorizes online and land-based casinos. The general expectation is to have the law passed in the first quarter of 2023.
After the law is passed, the federal government will begin the process of selecting the cities that will host a casino and the adjudication process. That will probably happen between 12 to 18 months after the law is passed. The same timeline is expected for online casinos.
- You recently launched a book: "Regulação dos Jogos de Azar e das Loterias no Brasil - 2021". Tell us about this initiative
The book results from the research I did in the LLM of the Federal University of Paraná, the oldest University in Brazil. The study focused on the regulations of the main gaming jurisdictions of the world to find solutions that could be adopted in Brazil. In the end, we propose a regulation that would be best fitted for Brazilian law. So the main goal of the initiative is to collaborate in the current debate about how to regulate all the gaming activities in Brazil.
- Conclusions: on the one hand Brazil is thinking about regulating the game, on the other, it must protect players with gambling addiction problems. What do the reforms in the field of combating illegal gambling and public health currently envisage?
The main goal the reforms have is to bring the gaming sector to the light by transforming it into a legal activity. When the activity is no longer a crime and it passes to be regulated, is possible to control and oversee the operators and address the gambling addiction problems. Moreover, the legal activities generate revenue that can be used in public health campaigns and in medical care.
It is important to regulate the game at the same time that provisions are made to ensure responsible gaming. The regulations that is been developed are on this path but there is a long way to go.