Exclusivo- Neil Montgomery participa do EGR Power Latam Summit em dois painéis sobre o Brasil

Neil Montgomery, founding attorney and partner at Montgomery & Associados, participated in two panels at EGR Power Latam. One of them, on February 28th, together with his Brazilian colleagues Witoldo Hendrich Jr., Thomas Carvalhaes (Vai deBob) and Camila Carvalho (Pay4Fun) called “Progress and politics in Brazil: the year that begins for the “sleeping giant” .

To open the second day of the event, experts gathered for a legal masterclass specifically aimed at Colombia, Peru, Argentina and Brazil entitled “Welcome and legal masterclass – highlight Colombia, Peru, Argentina and forward planning for Brazil” .

In it, speakers provided key updates and advice, as well as answering questions from the audience to ensure everyone left with the crucial legal guidance they needed to operate safely and successfully in our expanding regions. The event was spoken in Spanish, English and Portuguese, with simultaneous translation on the first day.

Neil Montgomery explained his ideas along with guest lawyers Tomás Enrique García Botta (Argentina), Nicolás Samohod (Peru) and Juan Camilo Carrasco (Colombia).

Really enlightening, in an exclusive event closed to participants, the EGR brought important news and valuable opinions to the regional iGaming market.

See the full interview

iGaming Brazil – With the bill currently awaiting presidential approval that would set the course for the regulation of betting and odds betting, do you think things are about to change in Brazil?

Neil Montgomery – I spoke with the new special secretary José Francisco Manssur on the 27th, and he gave very positive information that the government is indeed intending to publish a provisional measure amending aspects of the 2018 law, mainly regarding sanctions and taxation, Mainly for the player. As today fixed-quota bets are considered a lottery modality, the taxation for the player has an exemption range from the IR (around R$ 1900) and above that pays 30% of the winnings. They want to eliminate this exemption range, reduce the 30% rate, but start taxing from the first real gain. According to him, it would be per event and not per period, for example, if a bettor makes ten bets on a football match and wins in 3, there would be taxation on those 3. Even if in another match he makes ten bets and does not win anything, there would be no compensation period in the same month. It will be per bet and win event.

Secretary Manssur also said that in addition to the provisional measure there will be a series of ordinances dealing with the main topics, so there will be one on the licensing process, which must follow the model of authorization and not concession, one on means of payment (they want make it as difficult as possible for Brazilian bettors to bet on unlicensed sites, that is, they will only be able to receive the value of prizes in Brazil if the sites are licensed. They will work together with the Central Bank to avoid receiving money from outside, from unauthorized sites There will be an ordinance on the technological part, another on Advertising, so they want to publish these ordinances within the 120 days that the provisional measure has to be approved in Congress and converted into law.

Concession is when you have a bidding process where a limited number of licenses are awarded to the highest bidders. In terms of authorization, it is a little different because anyone who meets certain requirements previously determined by law, financial, technical, technological and legal, takes the license. This fosters the competitive spirit because the more licenses there are, the more competition there will be. Therefore, the authorization model is the most favorable.

In general terms, the idea is to approve this as soon as possible, implying that it will be in the first half of 2023, but as the measure has up to 120 days to become law, and there is a period of 6 months for operators to adapt to the new measures, this in practice takes us to 2024 effectively in terms of operation. But we are optimistic that the MP will come out soon.

iGaming Brazil – What is the importance of this event? What makes it different from other events?

Neil Montgomery – As I said yesterday, this was the event that introduced me to the world of gaming more than 15 years ago, coincidentally in the same hotel, the Hilton Puerto Madero, so I have a special fondness for this one. EGR Power Latam is always the first event in the region, in February, and it is a place where decision makers from Latin America meet, the sector’s personalities are here, the discussions are very good, fruitful. It works more like a chat with industry leaders than just speakers talking, so networking is good, the environment is good, the organization is impeccable, a very enjoyable event. In addition to ICE, and Bis now in June, I make a point of participating in this event.

iGaming Brazil – What will be the challenges for operators and international providers that want to enter this vast and lucrative market?

Neil Montgomery – The secretary commented on an interesting thing that may restrict competition insofar as perhaps not all operators who want to have the license will get it because they plan to increase the value of the license, which last year was R$22.2 million and for 5 years (information leaked to the press when the draft was published). This value seems to have risen to R$30 million, as well as the duration of the license. This is just to obtain the license, in addition to other costs incurred. In addition, there will be various ordinances for other items in addition to the financial investment itself.

This greatly increases the bar and will limit the number of companies that have this financial strength to be able to operate in Brazil. The Ministry of Labor with a universe of perhaps 45, 50 operators that will be able to become accredited, but statistics in Brazil today show that there are between 450 and 500 companies already operating in the market. It would only be 10% of that contingent and that could lead to a black market.

With this provisional measure, other ways would be implemented to prevent this black market from existing or that Brazilian bettors use unlicensed sites to bet, so advertising, for example, will be limited to licensed ones only. There can be nothing from companies that are not under the new rules. Financial transactions will also be restricted to the legal market, making it difficult for those coming from outside. When the bettor earns money from abroad, he will not be able to receive this amount easily. All of these will be challenges for new operators intending to enter Brazil.