Caixa will be able to explore the sports betting sector from the Health and Tourism Lotteries law
Photo: Agência Brasil

Caixa Econômica Federal will be able to explore the sports betting segment from the publication of law 14.455/22. The rule, sanctioned by President Jair Bolsonaro, allows the Executive Branch to launch two new types of lottery.

The resources obtained by these new modalities will be transferred to the National Health Fund (FNS) and to the Brazilian Agency for the International Promotion of Tourism (Embratur). Unredeemed prizes will be forwarded to these areas.

According to the new law, authored by Deputy Captain Wagner (União Brasil-CE), operators of these new lotteries will be able to provide the modality of numerical predictions, sports and fixed-odds bets.

The first case is that lottery with numbers drawn, in the style of Mega-Sena. While the modality of sports predictions depends on the results of games, as in the case of Loteca. The so-called fixed odds bet, in which the prize is announced in advance to the customer, is sports betting.

The terms of the law that launched the new lotteries can be questioned if they respect the Federal Constitution. “Among people specialized in the area of ​​lotteries, there is a unanimous view that this law is unconstitutional due to a vice of initiative”, defined Udo Seckelmann, a lawyer specializing in betting, in an interview with Máquina do Esporte.

“It’s a very simple law, which practically throws these three products into Caixa Econômica Federal’s lap, with part of the proceeds going to FNS and Embratur. The law does not have rules for granting this service to the private sector”, assured Seckelmann.

Competition in the sports betting industry

According to the proposal, the exploitation of the sports betting market may be provided by Caixa physically or online. The bank may make the product available in its lottery network, which could make competition unfeasible due to the structure already set up by Caixa.

“How is a private company going to enter a market against an operator with a distribution network of this size? Caixa does not pay ISS [Service Tax]. The private operator pays. The law creates more confusion and can create competitive distortions. Everyone was taken by surprise. Nobody understood what the legislator’s objective is with this”, asked lawyer Luiz Felipe Maia to the website Máquina do Esporte.

In Seckelmann’s view, the market should continue to be interested in the domestic market. “No operator has come to me with concerns about this new law. Eventually, this will be ruled unconstitutional. But, if Caixa introduces this product in the future, I do not believe it would alienate operators from Brazil”, he analyzed.

Law was proposed in 2020

The law was proposed in 2020 to favor two segments heavily impacted by the Covid-19 pandemic. Health needed more resources to face the health crisis, while tourism faced a severe reduction in travel and the impediment of displacement to minimize the spread of the disease.

But the law only came into force today, when these more serious impacts of the pandemic have already been softened. Brazil has 81% of the vaccinated population, according to a survey by Our World in Data. And tourism is experiencing a period of recovery.

The original law gave the government the opportunity to define rules for granting these lotteries to the private sector. However, Bolsonaro vetoed article 3, which gave the Ministry of Economy 30 days to regulate the law on the grounds of interference between the powers. Now, Congress will have to analyze this veto.

Since 2018, Brazil has already allowed the operation of sports betting houses. Law 13,756, enacted by then President Michel Temer, determined that the Ministry of Economy had until December 2022 to regulate the sector, which has not yet been done.

Currently, bookmakers operating in Brazil operate from offices abroad. Without regulation, the government cannot collect taxes from the area. The consumer faces some uncertainties related to the operation. This is because it is not possible to resort to defense entities to fulfill their rights, such as Procon, since the players operate outside the country.