The regulation of sports betting in Brazil was one of the most debated subjects in the last 4 years, with the iGaming industry closely following the unfolding of the governmental procedure in this period.
The modality was approved in the country in 2018 – under the management of the then President of the Republic Michel Temer – and had an established deadline for regulation of up to two years, extended for two more. Four years passed and the agenda remained inert in the hands of the previous government.
Valor Econômico recently published an article that explores the possible reasons for this inertia in the regulation of sports betting, reporting some incongruous issues and highlighting the great opportunity that Brazil missed in having another source of revenue in favor of society.
See below the article on the regulation of sports betting
Much has been said about the deadline for regulating sports betting (fixed odds bets, as provided by law), as determined by Law No. 13,756/2018. Characterized by the legislator as a public service, fixed odds bets were created by article 29 of the aforementioned law, which, in its 3rd paragraph, establishes a period of two years, extendable for another two years, for its regulation.
This period ended on December 13th, despite information that the decree responsible for the regulation would already be ready, awaiting only the signature by the President of the previous Republic.
The reasons for this omission – now, already established, in view of the end of the mandate without the decree being signed – have already been sufficiently discussed, ranging from a request from the evangelical bench to the generic inertia that befell the presidency between the end of the electoral process and the end of the mandate. The fact is that non-compliance with the legal deadline resulted in much bigger problems for the former representative than the loss of revenue and the incentive to informality – in themselves, issues that are equally relevant.
IN A SCENARIO OF SHORTAGE AND THE NEED FOR FISCAL ADJUSTMENTS, IT IS DIFFICULT TO UNDERSTAND THE OMISSION OF THE PREVIOUS GOVERNMENT
There is, at first, the subjection of the President of the Republic to the commission of a crime of responsibility, according to Law nº 1.079/1950, which, in its article 9, affirms that there is a crime of responsibility when the President of the Republic “willfully omits or delays the publication of the laws and resolutions of the Legislative Power or of the acts of the Executive Power”.
As there is an express legal order for the Executive Branch to regulate the legal provision, with a specific deadline for this, the situation typified as a crime of responsibility is clear. Furthermore, there is a clear lack of plausible justification for the normative omission, all the more so when four years have passed and, all the worse, when there is news of the existence of the normative act, ready and finished, with only its signature by the president remaining.
It is worth mentioning that the Ministers of State involved – the Economy Minister, at the time, in particular – also respond jointly with the President for the crime of responsibility. This becomes clear in the wording of article 13 of Law nº 1.079/1950, which makes the Ministers of State responsible for the acts that they are responsible for concurrently with the Presidency. Were it not for the thematic competence, the fixed odds betting law itself assigns the responsibility for regulation directly to the Ministry of Economy.
In addition to the crime of responsibility, the authorities involved in the regulatory omission may also be subject to administrative impropriety proceedings. As the lack of regulation – by omission – results in the loss of revenue, there is a clear loss of revenue, with a loss to the treasury.
In these terms, the possibility of framing presidential – and ministerial – inertia in article 10 of the Administrative Improbity Law is quite feasible. In fact, the provision states that “any willful act or omission” that “causes injury to the treasury” is an act of impropriety. Here, it is worth mentioning that the list of situations referred to in the article is not exhaustive, taking into account the use of “notably” at the end of the caput. So much so that, even with the enactment of Law nº 14.230/2021, which introduced changes to the Improbity Law, the exemplary character of the list of article 10 did not change, the same not occurring with article 11, which now has exhaustive assumptions.
In addition to possible accountability, omissions in regulation frustrate the provision of a public service. After all, Law nº 13.756/2018 itself attributed to fixed odds betting the condition of public service, which demonstrates the special interest in its provision. Although debatable, it is possible to understand the legislative option, based on the relevance of regulating this service, in order to establish mechanisms to protect the gambler, avoiding the risks of informality. In addition, episodes of sports fraud are recurrent, through the prior arrangement of results and, finally, the bets made in an unregulated way could serve as an artifice for hidden purposes, notably for money laundering.
In a scenario of scarcity and the need for fiscal adjustments, it is difficult to understand the previous government’s failure to regulate a source of funds that is already provided for by law. It is worth remembering that the need to equate public accounts was a recurrent discourse of the Ministry of Economy, throughout the four years of its mandate. In the current situation, it is not even credible to assume the illegality or inadequacy of fixed odds bets, since they have legal support and, all the more, they were considered a public service. The issue of the decree, if it had been done, would be the last act through which the president could, at least, boast about the benefits brought with the regulation.
So, however, he didn’t. And the issue remains pending, thanks to a disgraceful crime of inertia (to paraphrase Eça de Queiroz). After all, it created for the former President of the Republic and his Minister of Economy the risk of being subject to the sanctions of the Law of Crimes of Responsibility and the Law of Administrative Improbity.
In the new government, the expectation is that the omission will finally be remedied, if only because it is known that the new administration has just edited a series of normative measures aimed precisely at improving public spending. It is reasonable to assume that this attention is also focused on raising revenue, something to which the regulation of sports betting can significantly contribute.
