Ep 298: Brazilian bumps in the road

As Brazil heads towards a regulated gaming market it has been hit by allegations that the former President of the National Association of Games and Lotteries, Wesley Cardia, was pressured to pay a bribe to a senator to ensure a favourable result for the betting industry.

On today’s episode of iGaming Daily, supported by Optimove, Fernando Noodt, Senior Business Journalist at SBC Noticias, is joined by the Editor of SBC Noticias, Lucía Gando, and Senior Journalist, Isadora Marcante, to analyse the allegations and what they could mean for Brazil as lawmakers continue to draft legislation ahead of the opening of the regulated market.

The trio also discuss the implications of a Brazilian court partially upholding a lawsuit from the Rio De Janeiro State Lottery that seeks to authorise the National Telecommunications Agency (ANATEL) to verify whether online gaming and betting operators in Rio De Janeiro have legitimacy to operate in the state.

In the final part of the episode, the show switches focus to Argentina and the city of Buenos Aires where regulators have chosen to stop issuing new licenses to operators in a bid to combat underage gambling.

Host: Fernando Noodt
Guests: Lucía Gando & Isadora Marcante
Producer: Anaya McDonald
Editor: James Ross

Remember to check out Optimove at https://hubs.la/Q02gLC5L0 or go to Optimove.com/sbc to get your first month free when buying the industry's leading customer-loyalty service.

Creators & Guests

Guest

Isadora Marcante

Sports Business Journalist & Founder of the Online Academy iGA ⚽️

What is iGaming Daily?

A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.

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Not everything seems to be shining under the sun while Brazil continues to push towards a completely regulated environment for iGaming and sports betting. A court ruling has trampled down operators' efforts to establish their business in the country and set a major hurdle for their aspirations. Welcome to iGaming Daily, where we will dissect all of that and more, like we always do, of course. I'm your host Fernando Nott, senior journalist for SBC Noticias, and I am again joined by the boss.

Today, Noticias editor Lucia Gando. Lucia, how are you today? Thank you. Well, the boss and astrologer, according to Anaia, the producer of the show. We have these job titles and Anaia, who's producing this episode and always produces our episodes, has typed in astrologer for who is a big fan of that whole world. And we are also joined by SBC Noticias Brazil's Isa Dora Marcanti. Isa, how are you today? Hi, Cher. Hi, boss. I'm very good.

Good, thank you. It's a bit rainy today, unfortunately, but what can I do? Like we have sun all year round, so a bit of rain doesn't hurt, but I'm very happy. Yeah, like I said, not everything is shining under the sun and there's no sun at all today because lots has been going on in Brazil. But before we dive into that, let's thank iGaming Daily's sponsor Optimove, the number one CRM marketing solution for the iGaming market.

56 % of the EGR Power 50 personalized player experiences with OptiMove. And as a special offer, OptiMove are offering new clients a free first month when they buy OptiMove. For more information and claim the free month, go to optiMove .com slash SBC. Links will also be left in the podcast episode description, of course, so you can find it easily. And we were talking about Brazil and how it seems to be going through

some difficult, not a difficult time maybe, but some news that have not been as bright as the ones that we've read and heard and talked about in this podcast previously and some major development actually happened in the CPI ESA. Yes, so Mansour, which is that former

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a special advisor for the minister of finance in the sports betting regulation process last year. So he testified at the CPI and he said that the former president of the national gaming and lottery association, which we call ANJL, Wesley Cargia, went to him to say that Felipe Carreras, the rapporteur of the CPI at the Senate, allegedly requested a bribe.

from the association to benefit the betting industry at the CPI. Mansoor also said that Wesley didn't have any proof and apparently didn't take what happened to the authorities as Mansoor suggested to him to do. So, well, right now we just have this major declaration from the former advisor and we have to wait to see again.

hashtag, wait and see what the CPI is going to do about it. If they're going to investigate that, if they're not going to investigate that because Carreras is the reputer of the CPI at the CNH. So it could lead to a bad reputation of the industry, which we already have in Brazil. People are not very, a big fan of sports betting industry here. But yeah, we just have to wait and see what's going to happen now. But that's a...

very bad thing if that's true, it's a very bad thing. So this is the CPI that's investigating match fixing, right? In Brazil. So let's flip things around a little bit about what we discussed earlier in the pre -production of this podcast and let's remind the people where we are with the regulation for the gaming industry. Let's remind people that are listeners that Brazil has just

approved a commission has just approved in the Senate the land -based regulation, right? And then we have the the iGaming and sports betting project that was signed by Lula but we are waiting for the for the for the ordinances to to be to be approved. Where are we standing right now with that?

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Like you said, the law 14 .790 was signed last year by Lula on the 30th of December. And after that, a series of portarias of law ordinances started to be in draft to be published by the end of the year, this year, 2024. So we have some law ordinances already published, such as the rules for operators, the rules for payments providers, the rules for

how the registration process is going to be, what the companies must have to be able to open a company in Brazil and to hire people and to operate sports betting here. But we're still waiting for a bunch of other portfolios to be published, such as responsible gambling, advertising, sponsorships, which are very important to the country and to the industry, especially that we have the CTI as well, that responsible gambling.

and match fixing are big problems in Brazil as well. They really want to set rules that will not forbid 100 % because we cannot do that, but at least to stop what's happening right now, what we saw at the Brazilian Championship in 2023 happening. So we still have to wait for this law ordinance to be published so we can say that we have a 100 % regulated market here.

Okay, so we'll have to see if this statement from Manzur has any impact on the Portarias coming up. But let's go back to something I mentioned in the intro today. A court ruling that has trampled down operators' efforts to establish their business in the country. That's what I said exactly. And why don't you take us through, Isa, what

is this ruling that has everyone shaking their heads in Brazil? Well, the lottery of the state of Rio de Janeiro, we call it Loterji here in Brazil, presented a situation to the federal regional court, one in Brasilia, that they didn't want online sports betting.

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and games operators to be operating within the Rio de Janeiro territory without a license from Lotege. What happened is this regional federal court granted partially the demand of Lotege. And what is this demand? That Anatel, which is our national telecommunications agency here in Brazil, they must verify whether being operators and online games in Rio.

have the legitimacy to operate in the States. So they can say, okay, you can be life or no, you're going to be blocked. But the problem is like, hasn't Clever Lopez Cançada was very happy, we can talk more about that. But the other people or the other association and the institutes in the industry didn't like very much this decision from the court in Brazil.

What did Hassen Kleber say? He celebrated it on LinkedIn. He was very happy about it because he considers that Rio de Janeiro can grant access to legal sports betting sites.

the rest of the associations like the Instituto Brasileiro do Jogo Responsavel. That was perfect. They are worried about what this means that only a state can prohibit certain sites which can have a national license. So it's going to be very competitive now.

Not so clear when it comes to national and state regulations. So the industry is aware of the situation and is worried about this sentence. So let's see. But yes, in Rio, they are happy as they can control, have more control of what's going on in the industry and what sites are available for the public.

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OK, so we have mentioned the ANJR and the IBGR, they both issued statements about this. Yes, they expressed their concerns about this conflict between national regulation and state's regulation and what is going to be the impact once that the national government

grants all the licenses. Some of the platforms will be legal nationwide, but in Rio de Janeiro, they could be banned. So it's not very clear for the industry how to move forward with this decision. Yeah. I think that two main points that were brought up by the ANJL and the IBGR

is that A Jail said that, obviously, we have the 14 .790 law that regulates sports betting and online games industry and the law ordinance 127 that give the companies until the 31st of December this year to be regulated. So they say that a stage

a local decision cannot be, like, cannot be, well, sorry, just - It would have priority over - Yes, exactly. So a local decision cannot have priority over a federal decision and a federal law. And IBGR also said that this decision actually is -

It goes against what is exactly the responsibilities of Anatel because Anatel doesn't have the responsibility of verifying and to make sure that the operators have the license. These responsibilities are at the minister of finance's hands. So, like Lou said, if you have a federal license, how come you cannot operate in Rio de Janeiro?

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you have a federal license, it means that you can operate nationwide. So you can operate in every single territory in Brazil. So I think this if they don't maybe redo some articles in the laws that legalize and regulate the market in Brazil, that could be a major problem for us in the future. Okay, so we

We will set the hashtag Brazil wait and see what happens with this ruling and what does it mean for the near future of the industry. We'll see about that. But now we will take a plane to Argentina and while we are flying, we'll do a very brief commercial break and we'll be right back. Hello, we're back with the podcast iGaming Daily. And while Brazil is still working to set a regulated market, neighbor Argentina.

has that mostly covered by now. While most provinces have already enforced legislation and kicked off their markets, difficulties have surged only a few years into the legalized era. The city of Buenos Aires, for instance, has just decided to stop issuing new licenses and is taking steps to limit the segment. Fer, why don't you tell us more about what happened over the last few days? Well, yeah, the news is definitely...

big, were definitely big last week because Jorge Macri, who is the mayor of the city of Buenos Aires, made a statement together with the lottery and other government officials saying, okay, we are going after or we're trying to fight underage gambling and problem gambling. And so we have decided to take a few measures, a few steps to regulate.

the industry, even though it's already regulated, but to enforce new measures. And one of that is, like you mentioned, stop issuing new iGaming licenses. So right now there's 11 operators working in Buenos Aires, in the city of Buenos Aires. Let's remind our listeners that there are two regions called Buenos Aires that are not necessarily the same. There's the province of Buenos Aires, which is a big territory, much like a state.

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And then there's the city of Buenos Aires, which is the capital of Argentina, the capital city, which operates itself as a province. It has mostly the same authorities as a province, as another state. So the city of Buenos Aires has decided to stop issuing new licenses. Let's go back and remind us that there was no limit to the amount of licenses the lottery of the city of Buenos Aires could issue. So right now,

There's no more. So just the 11 that were already operating. And that's why they have decided to do this because they want to allegedly, apparently that's what they're saying. They want to fight underage gambling and they think that they can stop the underage players from accessing websites by not issuing new licenses. That looks like

their reasoning, right? But of course, legalized or regulated operators have their measures to prevent underage players from accessing their websites. So they have decided to stop doing that and to start blocking websites and start working with associations to get websites blocked and stop this. But the major

major point is that they have stopped issuing new licenses so no new operators in the city of Buenos Aires. Lulu, why do you think they have decided to go this way? Well, as we've been mentioning in this podcast and in SBC Noticias, there is a huge demand from society to address the industry in general.

We didn't have a culture of sports betting and iGaming before the pandemic that was very strong and very popular. And in the last few years, the industry has been growing and the public is very wide now. But people in general are concerned about this growth and the fact that

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sports betting industry are like everywhere at the marketing level, like influencers, celebrities, TV, radio, streaming, podcasts, and wherever they are everywhere. They are sponsoring sports and everything. They just want a legal framework that helps

young people not get involved in this, which is something that is happening, especially in illegal sites. So yes, there's this huge social demand to address the industry and limit it in some ways, especially in marketing and advertising. Try to regulate it.

and reduce it. Well, are the authorities taking any measures to tackle illegal gambling, sir? Well, yes, they are. Just yesterday I saw a reel or a video in social media of Jorge Macri, the mayor of the city of Buenos Aires, saying, OK, so we have now enforced blocks in the internet networks, in the public schools to prevent the

teenagers from accessing websites and then there's also I'm going to take a step across the general pass which is the avenue that divides the city from the province and going into the province and talk about how the justice has blocked a hundred and ten websites that operated illegally in the

in Argentina in general, but this is the justice system of the province working towards this block. And I think that's the key thing right now that regulators need to do rather than just go ahead and stop issuing licenses, but actually take steps to block the illegal websites and the illegal operators that are

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actually targeting and racing to get the vulnerable audiences like miners and problem gamblers that they would face restrictions in the legalized, in the authorized operators, but they don't get those in the unauthorized, in the unlicensed operators. So it is very important that the justice like the province of Buenos Aires just did.

takes action and blocks websites that operate illegally. So this was a joint effort between the police and the public ministry and of course a judge that actually enforced the request from the DDA, the attorney. So they moved swiftly to block 110 websites and in the city of Buenos Aires back to this side of the street.

The lottery of the city of Buenos Aires has urged influencers and celebrities to stop promoting illegal gambling websites because if you go to social media from some celebrities, you will see definitely advertising for illegal platforms. And right now in Argentina, Big Brother is very big. You know that reality TV show. And some of these participants are very, very influential.

and have a very big impact in the audience. And there were many former participants of Big Brother that were advertising for illegal operators and the lottery of the city of Buenos Aires has urged them to stop. And if they don't, they will take legal action. They will like subpoena them for actually breaking the law because there is a law

that states that whoever that operates, whether it's themselves or through a third party, may face jail time for illegal gambling. So they have urged celebrities to stop doing that. So they seem to be moving towards what we have been asking them to do for quite some time now, which is taking steps to prevent illegal operators from working in the city.

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Before we go, where do you both see this going in the near future? I'm afraid that we're going to see some restrictions in publicity, advertising, marketing, especially with regarding influencers and celebrities. I think Argentina could follow the path of Spain that has banned all marketing activities.

Mostly, so yes, I think we are going that way because the society pressure is very high right now. So some things are going to change. Yeah, I definitely agree with you, Lou, with Argentina going the same way as Spain did with all the restrictions, even though I'm not sure Spain has actually gone back with that. But

But yeah, definitely I think operators need to be very careful from now on with their marketing efforts because I mean, of course, when I say operators, I of course mean the licensed operators because the unlicensed operators should not be operating at all. And that's the job of the regulators to stop them from doing that and to protect those who are actually paying taxes and everything. But the licensed operators really need to take careful steps.

with their marketing efforts because I'm seeing them with a different eye than the general public. The general public right now has them on their bad side, right? And everyone is talking bad about the industry. They think the industry is bad. They think they only target the miners and they want people to be addicted to gambling and whatever. And I'm seeing them from a different perspective, but I also see them

maybe pushing it a little bit too far and they probably need to start doing campaigns to prevent this, not only because they should, but also in terms of their image right now, which has been compromised in Argentina at least for now. So they definitely need to be careful for their next steps.

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Well, I think that this episode was just another reason why we say Argentina and Brazil are just like brothers because we're very similar, like including in the regulation of sports, but in all iGames processes. Thank you very much, Karen Lu for this episode. To the listeners out there, links to the topics discussed today will be put in the description, but make sure to like the iGaming day LinkedIn page and...

course or SBC Notícias and SBC Notícias Brasil pages to not miss a thing related to the Brazilian and Latin markets. See you next time.