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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
speaker-0 (00:00.078)
To our audiences, it's clear Lula doesn't care about these facts. He is using the bets regime as yeah, as and he's even said stated this as an enemy of kind of PT reforms agenda. He places bets with billionaires and banks against the government and its current regime. And this is a populist move by a populist president.
the messaging's very good and he is actually to a certain extent he is sticking to his agenda and to his campaign principles. in many ways we could have seen this coming.
speaker-1 (00:46.862)
Brazil's betting regulated market has been thrown into uncertainty only 18 months after regulation. President Lula da Silva decided to end and ban the bed slaw regime, and it has generated a lot of chaos and concerns in the Brazilian market. So, is this the end for the Brazilian regulated market or is it going to find a way back into regulation? Welcome to iGaming Daily, where we will discuss all that.
It call it what it impacts on sports, operators, and of course the illegal market as well. I'm Fernando Nott, Media Manager for SBC, and your host for today, where I'm joined live from Lisbon by Ted Mamer, editor at large. Ted, how are you today?
speaker-0 (01:35.746)
Well Fernando, good to see you in the flesh. And to the audiences, the Portuguese migration have have let me into the country. So yes, I'm here for the SBC Lisbon Summit. Yeah, absolutely. Very pleased with myself, yes.
speaker-1 (01:49.218)
Yeah, yeah, looking forward to the event after going through migration and after a very long fight in my case. And of course another long fight for the boss, La Jefa, Lucia Gando, editor for SVC Noticias. Lou, how are you today?
speaker-0 (01:55.904)
Since four o'clock, right? So
speaker-2 (02:07.426)
Hello Fer, yes it was a long flight but I'm happy I'm in Lisbon finally to discuss these issues. This is going to be a challenging event both from me professionally and for the industry, especially Brazil. So we will see.
speaker-1 (02:24.62)
Yeah, absolutely, absolutely. And well, of course, excited about the event, but we have podcast to make here. But first let's thank Optimove, the creator of Positionless Marketing and number one player engagement solution for iGaming and Sports Betting operators. But now let's get on with it. President Lula da Silva decided to the termination of the best law regime. So what does this mean for for the gaming market and what what
What's the decision about that?
speaker-0 (02:57.002)
Okay, so filing in this news on Saturday, as it broke, you know, being kind of about twenty four hours after of you know, a couple of hours after it got filed out in Brazil, there is kind of a state of kind of disbelief what has happened and how it was executed. A presidential measure was signed by Lula and you know, to put it simply, he's kind of a direct intervention there. And he's moved to terminate
The Brazil Betts Law, which as you said has been lied for kind of eighteen months, has regulated the market since the first of January twenty twenty-five. And for current licenses there, the options look very bleak. it doesn't seem like any of the opposition want to kind of front a challenge to Lula, and there doesn't seem to be a roadmap towards launching a replacement regime.
The affairs now passed on to Congress, which has one hundred and twenty days to pass this as a federal law. the situation's bleak to say the least.
speaker-1 (04:03.242)
How c how significant is this moment for Brazil considering it only approved the Bet regime in January twenty twenty five or it started in January twenty?
speaker-2 (04:12.458)
Yes, it's less than two years of the market going so this is a very challenging time for Brazil and of course uncertainty is what most of people are feeling right now. We know that operators have paid a lot for the licenses that were supposed to last at least five years so they are in shock.
basically and looking forward to fighting this in any way that it's possible both legally or in the Supreme Court or the Congress. operators are getting ready to get together and see how they're going to handle as an industry as a whole, not like in each way differently, but we'll see.
speaker-1 (05:09.868)
Yeah, and I think that's a big part of it because operators in Brazil specifically have been working together for some time with the with the organizations, the ANJL, the IBJR. So there's there's there's teamwork in the industry. And one thing that that stands out in the in this whole process is that the government did not include the industry at all when it decided to to to go this way. So
I think uncertainty is s definitely a big word out of this, but Ted you're you're making a face here. what what are you thinking?
speaker-0 (05:49.51)
look, it's a good point on the coordination. Yes, there has been. And I think it was needed because Brazil's always been a market that's been constantly in transition from gray status to regulated. You have to remember that the bets law launched with a lot of kind of principal foundations missing. It was unfinished, especially on c consumer protections, advertising, you know, betting rights, even kind of the licensing between the relationship between kind of state owned assets versus the actual market.
To me it seems that the Betts Law was rushed. It's always been an unloved framework. The shock here is that they went for kind of this outright ban as the solution to all the problems that Brazilian gambling faces. And I think that's kind of what's left for this kind of status of disbelief by the operators. Why take such an extreme measure to solve problems which are achievable and which are, you know, solvable, yeah.
speaker-1 (06:47.83)
And of course these companies have invested heavily for these five year licenses and now they have been forced to to shut down to basically. Of course, I was reading a lot of reactions on LinkedIn from operators in Brazil saying, Hey, this is not an end, this is a pause. That that was like the general
The general thinking, I think they're they're being optimistic, of course, and and hoping that it will eventually go for the better for the industry, of course. but I see you I see you nodding to it, I guess.
speaker-0 (07:27.788)
No, Lucia, I wanna go and bring you in here because I I can't see that reaction being in London about, you know, what is the y the instant take on on these developments that have been kind of fast moving. So what grounds are there for a challenge against what is a kind of presidential intervention of a market and a market that was to some extent working and was doing its thing, raising taxes, were creating jobs and also creating kind of an economic value chain.
speaker-2 (07:56.962)
I think this is more like a political strategy by Lula. We know that Brazil is going to have presidential elections in two weeks or one week, 10 days or something. this is more like to gain the mass media and to gain more audience, think more votes, of course. But I don't think that it's very easy to apply and to change and make disappear a whole industry from one second to another. So I think
There are ways to fight this and the industry, it's been only two years, but it's super consolidated and they have a lot of tools to fight against it together, of course.
speaker-1 (08:39.02)
And we have been t discussing about how how much of a political factor i in is is is is forcing this or not forcing is driving this decision by Lula. So ahead of the election he's going all in against the the the betting industry. so that drives some I guess the political win for for him, like it in
considering that the industry tends to have this bad wrap, you know, in the in the public opinion. But of course this is probably gonna turn into a legal battle. And of course, Ted you were mentioning the the period the Congress is is going to have to approve this this MP.
speaker-0 (09:27.946)
I can only be reflective of what we kind of reported on. And for me, it appears that Lula never liked this regime. Yes, he authorized it. Yes, it's his signature. My view is that Lula, and especially the PT, as this kind of populist left wing government, always wanted to place a firm s hand of the government on the regime itself. I n I I I ne I don't believe that he Lula
ever liked the structure of the market and how many licenses were given out. And I don't think he ever took time to understand kind of how to implement an effective regime governing the oversight of gambling licenses. Looking at what Luthia said and in terms of yes, there's a election round the corner, I I don't believe that it's a political move. I I just genuinely believe that it is down to Lula himself, his grievances with the market and his
him wanting to have some kind of input in the final say of how gambling should be regulated in Brazil. There's been so many kind of mixed messages by the PT government. I mean at one point they wanted to ban people on welfare and welfare credits. Then they talked about banning online casino, higher risk games. they talked about kind of putting all these kind of very kind of protected measures in there in kind of guarantees. That never happened and then Lula just went straight to an outright ban.
He definitely faces some quotes a probe by Congress. The trade bodies need to find out how that decision was taken. Yeah.
speaker-1 (11:04.728)
I mean to be fair, Lula did say when the the whole regulation was being discussed, he said, I do not like this at all. Yeah. I will not go against it, and if the Congress approves it, I'm gonna sign it, but I do not like it. So I do see a way in which this is actually Lula pushing the the ban because he generally believes that the regime is wrong. But the timing feels oddly suspicious.
Like we are days away from from our election in Brazil. So and and you are pushing provisional measure which is provisional, so it needs further approval. And so it it kind of could sound like Lula is just doing this for the for the likes in social media terms, you know, and then knowing that this will eventually fail and and and get overturned and we will be right back to to to ground zero and back with their normal regime.
speaker-0 (12:05.198)
Well well then I'd say it's a lot of drama for nothing.
speaker-1 (12:07.418)
Yeah, yeah, that's for sure. That's for sure. That's for sure. But that's that's Latin America, right, Lou? That's we're all about drama.
speaker-2 (12:15.054)
Yes, that's what I was going to say, very Latino of us, of course. But I think it's harder because it's not like it was an illegal activity and it's suddenly super banned and whatever. But the licenses were approved by the government. They were operating under a regulatory framework by the state.
I don't think it's easy to unfold everything right now because they have papers that support their operations and their investments in Brazil. So I think it counts, right, to have those documents.
speaker-1 (12:58.002)
Yeah, absolutely. Absolutely. there's a lot more to discuss about this decision. What will come after Lula decided to ban the the regulated beds industry basically. But right now we're gonna do a very quick outbreak and we'll be right back with more iGammy Daily.
Learn how Optimov's positionless marketing is changing how iGaming teams operate. Discover how operators are using Optimus positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bet slips, and create engaging game fied experiences. Learn more at Optimove.com. And we're back with more iGaming Daily to continue discussing the uncertain ecosystem in Brazil, the uncertain landscape rather, after Lula decided to
overturned the bed's law regime and has generated quite a ruckus in in Brazil. There's certainly a legal battle ahead. ANJL already said it will go into the the the the legal side of things to to to challenge this all win already to preparing legal action so what legal avenues could operators follow in this in this landscape?
speaker-0 (14:12.942)
We we're gonna have to see how this plays out and what route is taken there. I mean, when you look at it just on on the paper alone and what's been kind of processed, I think the challenge is directly on the PT government. what consultations they undertook and how can they just take an outright ban that i we're not just talking about gambling licenses, we're talking about a whole value chain. Luthia's gonna talk about the impact on football.
But also kind of the economic investment. And it was also a ban that went against the Recita Federal, the tax agency, that stated that it was going to double taxes and that the the framework, how however kind of however kind of liable it was, it was accountable and it was effective toward generating tax. There's gonna be a lot of lawsuits out in Brazil about how this was implicated.
How the g how the PT government are involved in this decision. however, I think that even post anything it goes to kind of these legal courts, there's no guarantee that the market comes back as it is. One of the things that I think that will likely happen in in in Brazil is that I think that this is going down to kind of politicking and lawfare, where the PT government and others really want to add kind of substantial changes to the market.
They want to have tighter control, tighter command and licenses. Brazil, the Brazilian market is fundamentally going to change. I think people have to accept that.
speaker-1 (15:51.306)
And of course it's gonna change in in a way that may not be as positive as Lula expects, because when you ban the regulated gaming industry in a country that already knows how to gamble and how to bet, you're inevitably gonna have a rise of the illegal betting market. And Flutter had made an estimation that from twenty twenty five to twenty twenty six the illegal betting activity in Brazil had gone down from
forty one to fifty one percent two thirty eight to forty four percent of the market share. so could this decision by Lula eventually mean that the illegal market rises again and Brazil loses that progress?
speaker-0 (16:37.452)
To our audiences, it's clear Lula doesn't care about these facts. He is using the bets regime as yeah, as and he's even said stated this as an enemy of kind of PT reforms agenda. He places bets with billionaires and banks against the government and its current regime. And this is a populist move by a populist president.
the messaging's very good and he is actually to a certain extent he is sticking to his agenda and to his campaign principles. in many ways we could have seen this coming.
speaker-1 (17:20.128)
And of course, another segment that is worried about this decision is football. Football clubs actually in Brazil, most of them are sponsored in the in the top five at least, are sponsored by betting companies. And recently they issued a mass a mass message. they all agreed to say, Hey, if they ban bets, football could end. And of course that sparked a lot of backlash.
from public opinion saying hey lula himself said sao paulo won the the world time the world title without having a bed sponsor and all that but what could eventually qu what could this eventually mean for for football the the bet span
speaker-2 (18:07.086)
I think for Lula the most challenging part of this fight is that the government will receive a lot of less revenues than they were having with the betting industry and this will impact directly into the sports sector. We know that Brazil wanted to invest at least 20 billion reais in football, especially in small clubs, women's football.
Brazil is going to have the Women's World Cup next year that was going to be big with the betting sponsors and everything. So the revenue part is going to be the most challenging for him because this is where he takes the money to pay all his populist social programs. yes, we know that football
There's actually in Argentina a lot of memes about how it's beneficial for Argentina that Brazil bands, betting industry and football clubs stop having all
speaker-1 (19:12.632)
This yeah, no no more Flamengo Palmeiras finals in the Copa Libertadores, for example, yeah. for sure. but it's a tricky situation.
speaker-2 (19:21.326)
Yes, of course, it's worrying, especially for smaller clubs and all these other sports that were boosting by this income.
speaker-1 (19:31.476)
And Ted, could Brazil realistically return to regulation in the future? You kinda already said we can't really tell. but is it risking with this decision that it goes back to a pre twenty twenty five situation?
speaker-0 (19:48.278)
I'm I'm gonna separate this question 'cause I think there are so many kind of factors in here. Number one is what happens on on the fourth of October. Who is the opposition to Lula? Also c for the presidential gonna run off later in the month. And then what has actually happened? It has been a direct intervention, it has been a termination a direct termination of the market. And
Especially this week I'm gonna try to kind of find out what the actual sentiment is towards the Brazilian market. How confident are stakeholders that there can be no repeat of this? There's been massive investment into this market and we're not just talking about in you know, twenty twenty five onwards, it's on the build up, on the lobbying and also one thing to have kind of a regulated and fair play regime in Brazil. What does that look like?
That has never been kind of answered. it was such a short lived market. It was progressing in some senses. And in in all honesty, I think the majority of operators knew that Brazil wasn't perfect but were willing kind of accept the terms of play. Until they get offered something new or they see what's on paper, I don't think they're gonna they're gonna come back come back to the table.
speaker-1 (21:11.128)
So can w how how are we looking into how are we looking to Brazil going forward? Do you think it's over or is it just in po on post?
speaker-0 (21:20.066)
I'll say this for now and I'll keep it simple. I think Brazil i in a year of kind of shock news, I think Brazil's now kind of the biggest story. but there's so much to kinda play out. Lucia, what do you think?
speaker-2 (21:35.688)
I'm looking forward to talking with people during SBC Summit with Brazilians, of course, to see what their opinion actually is. But I still have hopes. I know Latin America, we are dramatic. We do this kind of stuff, but then we regenerate again. We find ways to fight back. Right? So I have hope.
speaker-1 (22:04.154)
Okay, we'll see. We'll have Shag wait and see if the industry fights back for sure. I think it definitely will. We'll see what happens with the Brazilian pres presidential election, which will play a huge role for the future of this vets regime post and ban who who who knows at this point is very early to say, but we do know that we do not know nothing of about Brazil right now. There's a lot of uncertainty going on.
But we will continue to cover. So make sure you subscribe to all SPC Media newsletters and of course follow iGaming Daily, both on social media and your preferred podcasting platform. Ted, Lou, thank you very much. Thank you very much, NA McDonald, for producing this episode. I'm Fernando Nott and to our listeners out there, we'll see you in the next one. Goodbye.