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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Fernando Noodt (00:02.294)
In the early hours of Monday, Lula
In the early hours of Monday morning, Luis Ignacio Lula da Silva was declared the winner of Brazil's presidential election, securing his fourth term in office. It marks a comeback for Lula, who had trailed narrowly in polls ahead of Sunday's vote, overturning the challenge of Liberal Party rival Flavio Bolsonaro. For the gambling industry, attention now turns to Congress and the fate of the presidential measure to prohibit online betting. With the election won, will Lula maintain his hard line on gambling, or will the prospect of prolonged legal challenges from operators, media businesses and football clubs force a more pragmatic approach?
Fernando Noodt (00:59.938)
Brazil's betting market faces another period of of uncertainty caught between political promises and the financial consequences of dismantling its regulated framework. Welcome to iGaming Daily, brought to you by Optimus, the creator of oppositionless marketing and number one player engagement solution for sports betting and iGaming operators. I'm Fernando Nott, Media Manager for SVC, and your host for today's episode we where we will discuss what happened in Brazil, the election, which has certainly
generated ruckus among the the industry which was expecting of course bolsonaro to to win to have fate on the the Betis regime to to come back but in the end it was Lula who won the one that enforced the the the overturn of the licensing regime in the first place so we'll have to
Wait and see, hashtag wait and see what happens now from this fourth term with Lula da Silva in office. And to discuss that, I'm joined by Ted Memur, editor at large for S VC. Ted, how are you today?
Ted Menmuir (02:11.71)
Very well Fernando, and yeah, ready to talk about Brazil with Leonardo. And yeah, you know, closely closely monitoring the outcome of what's going on.
Fernando Noodt (02:28.055)
Yeah, absolutely. I was actually quite shocked yesterday. I I was out on the on the afternoon. of course I'm based in Buenos Aires so my afternoon would be like very early in the morning for for you folks in Europe. But when I got back home and found out that Lula had won the the runoff, I I was actually quite surprised. I wonder how Leo reacted to this situation. Leonardo Biazzi, editor for SBC Noticias Brazil. Hello Le hello Leo, how are you today?
Leonardo (02:54.928)
Hello fair. very happy to be back, even though you always call me to just share my thoughts on bad news in Brazil. But my initial reaction was I was skeptical because as you put it, all the polls were pointing out to Flavio winning the election. so I guess a lot of people in the eye gaming industry in Brazil are disappointed with the r the results, of course.
Ted Menmuir (03:02.642)
Hehe.
Fernando Noodt (03:02.849)
Mm-hmm.
Ted Menmuir (03:20.212)
you
Fernando Noodt (03:21.939)
skeptical in in what way w are you where you to to this
Ted Menmuir (03:27.028)
you
Leonardo (03:27.16)
I did I did not see coming for me it was Flavio's election to win, not Lula's.
Fernando Noodt (03:35.403)
And what what's the perception like you that you you got from this this early or these first hours after knowing the result, both both in in general in Brazil and maybe from the industry as well, of course.
Ted Menmuir (03:35.87)
Mm-hmm.
Leonardo (03:42.143)
So
Leonardo (03:48.347)
we already have a big research firm, Atlas Intel. Their CEO in Brazil has said that the all the institutes got it wrong. They underestimated Lula's potential to to win the election because there was a big so the Lula changed his approach to the second round of the election, meaning that he got not his official campaign, but he got a big he
Ted Menmuir (04:11.284)
Mm-hmm.
Leonardo (04:18.17)
He rounded people in WhatsApp groups and that led to them organizing themselves in media but not only in also making physical manifestations all around Brazil. And all the these institutes all underestimated the potential of Lula to gain more votes, and that's exactly what happened. He got 11 million more votes in the second round than he got in the first round. And Flavio only gained 3 million votes.
In comparison to the first term. So it was like nobody was predicting this. Like you can't even blame the institutes for getting it wrong. It's just that this election was very tight. It was like vote by vote. So until yesterday you had like people convincing others to vote for Lula, essentially.
Ted Menmuir (05:01.78)
Mm-hmm.
Fernando Noodt (05:11.073)
And what's this was this actually a surprise or or is that an an exaggeration by by parts of the media that are actually sh shocked that Lula won over Bolsonaro?
Ted Menmuir (05:22.612)
Look, if I can take kind of my take from London, I don't think anyone could call this an upset or a surprise. And just by the format that in Brazil there is a runoff of incumbents if they fail to secure majorities in the initial ballot.
Looking back, some of the odds and percentages against Lula were hugely inflated. But I think that is more down to the bets taken on foreign platforms that did not really have a granular view of what's going on in Brazil. So for industry stakeholders, I think this ends kind of a cycle of bad circumstances and outcomes for gambling. And I think we're now moving on to the
Yeah, the kind of the final death sentencing of the pets regime that will be led by Congress.
Leonardo (06:16.634)
Yeah, and I mean fair it is a surprise, but at the same time Lula has won two elections a couple of decades ago. He won he like he came back from being arrested in two thousand eighteen, in getting out of prison and winning another election. When he won the first two, he also elected his successor. So Lula is quite successful when it comes to election. Like I I agree with Ted in the sense that we can't call it an upset, but this one
Ted Menmuir (06:25.064)
Mm-hmm.
Ted Menmuir (06:33.332)
you
Leonardo (06:46.628)
Was not in the books, and who knows? Like, we also had Flavio being caught up in lots of scandals in the past few days covered by the media, the big media in Brazil, including a scandal related to the betting sector. I don't know if I can delve deep into this. I don't think it's the place, but yeah, it's all covered by SBC News and SBC Noticias Brazil.
Fernando Noodt (07:15.137)
Yeah, absolutely. Anyone subscribed to all SBC Media newsletters might have already read about this. But if you didn't, that means you may not be subscribed to to our newsletter, so make sure you are by the end of this episode or I will be extremely sad. but going on with the with the results of the elections, Lula wins his fourth term in office. but let's let's talk about what what's on the immediate agenda of the PT.
government post election right now.
Leonardo (07:48.879)
I was following his discourse. He was very centric in a way that he admitted that his third government wasn't all good, that he wants to do things different in this fourth mandate. And he didn't like peep some people like people who who usually vote for the left in Brazil was hoping that Lula was going to be more aggressive with his words, but it was on the contrary. I think Lula recognized
Ted Menmuir (08:02.312)
you
Leonardo (08:18.772)
that a lot of voters who are more centric or oriented voted for him to prevent Flavio Bolsonaro to win the election. So he was he made like this this sort of he he acknowledged then like he even cited his vice president who has been like more right or centric oriented for all his career. Like he asked him to make a discourse too. So we don't know what is to come like
Ted Menmuir (08:25.436)
Yeah.
Leonardo (08:48.692)
Like he mentioned that he wants to regulate social media in Brazil, the big techs, mainly Meta, which was caught up in a scandal in Brazil, not promoting Lula's channels in Instagram, for example, taking down videos. So that's what he said. But regarding to the Bats regime itself, he didn't say anything. But on Thursday, so before the election, he said that the Bats, as we call it in Brazil, the operators.
will not come back. But that's not up to him right now. It's up to the Congress. It's up to the Supreme Court. But he he said once again that he doesn't want the bets to come back.
Ted Menmuir (09:22.004)
you
Fernando Noodt (09:34.251)
Let's dive a little deeper into into the the the Betch regime. Has anything changed for it and the the licenses that that were issued initially in the in when Lula signed the the the Betch regime in the first place?
Leonardo (09:47.331)
Yeah. so the big takeaway is when Lula signed that provisional measure, he also it was also written in there that all the licenses previously authorized by the government, the operators who paid 30 million reais to obtain them, all these licenses have been officially extinguished yesterday. And
Ted Menmuir (10:09.032)
Mm-hmm.
Leonardo (10:10.788)
It's one thing for the Supreme Court to judge the provisional measure unconstitutional, they can absolutely do that now, even though it's not looking likely, because that would be far easier if Bolsonaro had won the election yesterday. But Minister Fuchs can do that, he can cancel the provisional measure, but he would also have to reestablish the licenses because they have been extinguished and that's harder right now, like the whole
hope of the gaming industry in Brazil as far as I've talked with operators was that Fox was going to decide that before the election to not have the license extinguished. So it's a it's a period of of uncertainty right now for sure.
Ted Menmuir (10:58.836)
It certainly is. I'm just going to sum it up and say that it just feels like Brazil and Brazil's gambling licenses are still in this of never-ending kind of doom cycle that began since the campaign started. And I remember speaking to Leo on Friday and he quite adequately summed it up as Brazil now entering kind of a zombie state for online gambling.
which I kind of view as a very adequate expression for the state of affairs. And given that we also have Halloween in the background, so well done there, Leo.
Leonardo (11:37.395)
Yeah, and just to to sum it up what Ted said, there are operators, like I can name them, but they have laid down lay they lost their their employees, they had to. They're not coming back to regulated operations even if the government makes a new regulation or keep things as is and sell the licenses again. the industry
Ted Menmuir (11:51.325)
Yeah.
Leonardo (12:04.772)
will more likely like turn once again to offshore operations that will operate in a clandestine way because we are in this big grey zone right now.
Fernando Noodt (12:16.641)
Yeah, it's quite it's quite sad really to see the industry going down this road because a few months ago we were discussing so how will the the the amount of operators shrink from from MA and from from from business happening and now seeing that the industry is shrinking but because of often all-out ban by by by the government is really not the outcome we were expecting for the industry which was growing really fast.
Ted Menmuir (12:31.08)
Mm-hmm.
Fernando Noodt (12:46.111)
in Brazil. I guess there's a lot of work to be done. We're seeing like Flutter announcing that Betfair will no longer come back to Brazil even if the if the licensing regime returns and they will focus on on Bet Nacional and and other other companies announcing of course the layoffs you said Leo. so it's really it's really a a difficult scenario for bets in Brazil but there's a lot more to discuss here on iGaming Daily.
But we will do so right after this very quick commercial break and we will be right back.
Fernando Noodt (13:53.206)
And we're back with more iGaming Daily to continue discussing the future of the online betting regime in Brazil after Lula da Silva won the election this weekend over Flavio Bolsonaro. And so right now that that path where Flavio Bolsonaro won had the industry had Flavio Bolsonaro winning and and over
Ted Menmuir (14:02.231)
Excuse me.
Fernando Noodt (14:23.305)
overruling the the the the the the provisional measure to to bring back the licenses and all that that scenario's gone so lula da silva he continues in office for his fourth mandate so now the the situation has moved into the the this period of review by congress so leo do you think this is just a showcase for a certain death sentence of an unloved regime as Ted Memir has put it
Ted Menmuir (14:43.056)
So, I think this is just a showcase for a certain death sentence of a mother jay, I see.
Leonardo (14:52.346)
If not the deaf, things will never come back to the way they were. I can I think I can safely say that I would even put my money on it. So what we have now for the the senators, the the they they they have not started to discuss this yet, but they have sent proposals to change to amend to the original to the provisional measure. And there are nearly a hundred proposals.
Ted Menmuir (15:14.974)
Mm-hmm.
Leonardo (15:23.06)
As far as I've looked into them, a lot of them focus on bringing back sports books to a regulated scenario and keep online casinos out of the equation, just because as we've said repeatedly, betting was funding sports in Brazil, mainly football. operators were funding all our big competitions, they were funding our biggest teams, like we're talking about millionaire.
agreements that are now essentially extinguished as far as we know.
Or are they have been like just postponed until as until a solution comes out of it. So yeah, my money is on on the Congress trying to bring sportsbook back to kind of sauvage the the situation, but even then that is hard. Like Lula doesn't have the majority of the Senate, he will not, and in the Chamber of Deputies too, but a lot of those new politicians that were elected, they are also again
Ted Menmuir (16:21.264)
Mm-hmm.
Ted Menmuir (16:57.748)
Leo, just to of interject here, and Lula is now going to move towards his kind of fourth term. Fine, but how do you see kind of political blocs shaping up? Are they there to support Lula or to go against him? Does he carry more favour entering his fourth term?
Leonardo (17:22.342)
So the the Liberal Part has at least a hundred and fifty-nine members in the Chamber of Deputies and forty-one senators. They have the majority, but the thing is, with them winning so many seats in both legislative houses, we'll have more centric oriented members of the Senate and the chambers to move toward Lula, not because they love him, that's not absolutely not the case, but it's the instinct
Ted Menmuir (17:42.067)
Mm-hmm.
Leonardo (17:52.329)
of survival like because if they don't do that if they if they join the members of the liberal party they may as well be signing their their death sentence because
The then the Liberal Party will get only only stronger and then they will lose more seats in the next election. So my views, and it's not only mine, I was hearing like analysis yesterday and this morning from people that actually study this matter, is essentially that they will have to to see with Lu with Lula and at least agree on some of the things he has planned for this fourth mandate.
Fernando Noodt (18:33.353)
And actually an outright an outright ban could could see the the the government, the Lula daciba new government, face multiple legal challenges, not only from from the sports clubs, but also from media, from IT. Do you think Leo that Lula really wants to open this Pandora box of loafer?
Ted Menmuir (18:34.42)
.
Leonardo (18:55.154)
yeah, so the the argument that the sector has the about the the legal uncertainty that his provisional measure has brought, like that one is almost like uncontested. I even spoke with lawyers that are not defending eye gaming, that they're they're not advocating for eye gaming, but they say that the this argument, the one about legal uncertainty, is too strong. Like the government essentially promises something to these companies and they have
Ted Menmuir (19:00.724)
you
Ted Menmuir (19:13.565)
Yeah.
Leonardo (19:25.108)
Cancel it all. But one thing I'm I want to say about this is that people in the industry in Brazil were quoting the the period of the license. we have five years after we acquired them. And it was not that, it was like up to five years. So there's a clearly distinct distinction in there. And Lula always promises that I'm signing this, I'm regulating the market, but if I
Ted Menmuir (19:42.26)
Mm-hmm.
Leonardo (19:55.021)
don't like I will I will go back and cancel it so there is that like this this it's a clear distinction of having five years and having up to five years
Ted Menmuir (20:04.084)
Thanks
Leo, again, is there any sense that Lula is bluffing or he always thought that if he won, it would come to this kind of state of affairs where, look, it's a great campaign slogan to have bets, billionaires and bankers, but do you think that he might have just been pulling a fast one and saying, well, yeah, this is how...
Leonardo (20:22.3)
Mm-hmm.
Leonardo (20:25.766)
Yes.
Ted Menmuir (20:35.694)
I now get to my hands on the best regime.
Leonardo (20:40.1)
Yeah, so it was clearly divided. Like there were members of PT that wanted not a full-on ban because they feared the repercussions that this would cause in the society, in football especially especially. And he actually lost votes mentioning the bet the ban on betting in the first round. That is like proved people did not embark on it. They did not vote for Lula because they want a ban on betting.
My thing is like I always I wanna I always thought about this this situation is that it's a win-win for Lula anyway, because if he advocates for the ban on betting, which people want in Brazil, over seven percent of the Brazilians think that betting should be banned and he wins, clearly he wins, like that's his stance. But if he promotes that, advocates for it and fight in the Congress and lose, then it's still a win, like he can
Ted Menmuir (21:13.012)
you
Ted Menmuir (21:30.472)
Mm-hmm.
Leonardo (21:38.596)
clearly say the senators I tried but the senators won't budge so I think Lula will win this no matter what in in a sense like he will have the the upper hand at least rhetorically
Ted Menmuir (21:43.165)
Mm-hmm.
Fernando Noodt (21:55.68)
In nineteen sixty-four, a young worker lost his pinky finger on his left hand, leaving him with only four fingers, which have been with him until today, which starts his fourth mandate after winning by four million votes over Flavio Bolsonaro. and we are amid this four month period for the Vets regime to be reviewed by Congress, this provisional measure of course. so four
Ted Menmuir (22:16.02)
you
Fernando Noodt (22:24.413)
Is the lucky number it seems, or the unlucky number. We'll have to hash that wait and see about that. Thank you very much, Ted Memur and Leonardo Biazzi for this very insightful talk, insightful chat about the Brazilian election, what's w the how things are looking in Brazil and what we can expect for the near future in the country.
Ted Menmuir (22:30.068)
you
Leonardo (22:47.27)
Yeah, I just want to invite everyone that is listening to us to show up and watch the SBC Digital Day that we have this Wednesday where we will be discussing the elections, the provisional measure, the stance on the Supreme Court. Like all this will be debated with specialists from the iGaming industry, so we will wait till there for sure. Wednesday at eleven AM in Brazil.
Fernando Noodt (23:10.658)
Yeah hop.
Ted Menmuir (23:11.188)
you
Fernando Noodt (23:13.442)
That's Wednesday, October 28th. So hopefully you are listening to this episode in time to register and attend that webinar where we'll we'll have more information about Brazil and more insightful conversations on the outlook for the Brazilian betting regime. That has been all for today. Thank you very much, guys. Thank you very much, Anaya McDonald, for producing this episode. I'm Fernando Nott and to our listeners out there, we'll see you in the next one. Goodbye.