Speaking during the latest episode of iGaming Business’ World Series of Politics podcast, Baungartner told hosts Brendt Idan and Brendan Bussman, “We know that in the gaming world, it’s never 100% regulated, but I think [the Brazilian government] can [regulate] a very good share of the market. I think they can cover 80%.”
Baungartner noted that the Brazlian government is considering blocking unregulated operators from using popular payment method Pix, which is controlled through the National Bank and enables transactions to occur in less than 10 seconds.
“Pix is really important and is used by 99% of the market,” Baungartner said. “They think they can block those operators through this payment method. It’s a really fair way to think.”
The first online licensing window is currently open and will close in August, with operators required to pay a BRL30m ($5.5m) licensing fee. The legal online gambling sector will be live by 1 January 2025, according to the regulator’s timeline.
Baungartner acknowledged that not all firms currently operating in Brazil will be able to afford the licensing fee, noting that the grey market would always be present in the country.
“Some of them don’t have the $5.5m to apply and they are comfortable as they are. I think the grey market will always be there,” he said.
So far only one operator has applied for a licence, but Baungartner says he expects up to 25 firms to apply before the closing date.
“They know the online market is already up and running since the last few years ago. There is no other way to go and the population, government and everybody is waiting for these regulations,” he added.
Baungartner also said he expects the efforts to regulate in the country will drive M&A. Earlier this month MGM Resorts announced it was acquiring Tipico’s US sportsbook platform, in a deal that many believe will drive MGM’s online efforts in Brazil and the rest of LatAm.
Regulation in motion
In January Brazil’s president, Luiz Inacio Lula da Silva, made regulation in Brazil official, ratifying a new regulatory framework for sports betting and igaming.
President Lula’s approval came after Brazil’s chamber of deputies voted on 21 December to endorse the bill. Igaming was added back into the bill after previously being removed by the senate.
Brazil’s final online sports betting regulation has a July deadline, which some industry commentators see as ambitious.
“The schedule is reasonable and doable,” Baungartner previously told iGB in April. “The [ministry of finance] just have to assure that all other government departments are on the same page and don’t block the process.
“Since 2005 we’ve been waiting for this, almost 20 years,” Baungartner said of the shift to a regulated market.
“And if everything goes well and smooth we can get some casinos as well in 2025,” he said.
Running parallel, Brazil’s Justice and Citizenship Commission (CCJ) approved a bill to legalise casinos, bingo, jogo de bicho and betting on horseracing in Brazil on 20 June.
The move cemented the country’s intentions to move into regulated gambling both online and offline.
Original article: https://igamingbusiness.com/uncategorized/aposta-ganha-cco-regulated-firms-could-make-up-80-of-brazil-online-gambling/
