"An unlimited number of licenses is the best option for Brazil's sports betting"

By the end of last year, the Brazilian government approved the Provisional Measure (MP) 846, then signed into Law 13,756/2018, which authorizes land-based and online sports betting in Brazil, but the legislation is still to receive enforcement regulations. On Wednesday, a public hearing was held in the Sports Committee of the Chamber of Deputies with the aim of discussing this regulation. The topic will be discussed again at the House on Thursday, in the Education Committee.

The hearing was proposed by deputy Evandro Roman, and one of the speakers was Francesco Rodano, Chief Policy Officer at Playtech and former online gaming regulator in Italy, who shared with Yogonet the key ideas he developed and his personal view on Brazil and LatAm's online gaming landscape.

Why have you decided to participate in this public hearing? Could you give us an insight into your address?

When I was invited by the Sports Commission of the Chamber of Deputies, I had no doubts about participating, as a sign of respect for the Brazilian political institution, and as a way to share my experience in a matter —the regulation of online gambling— that I’ve been involved with in the last 12 years of my life. Also, this is my fifth visit to Brasilia in three years, and despite I can’t speak Portuguese, which I regret, I find that Brazil has so many similarities with Italy, especially because Brazilians are so friendly and welcoming, that I almost feel at home here.

In my address I tried to summarise in 10 minutes my long and challenging journey as a gambling regulator. In 2007, when I started, there weren’t any countries already regulated under a local licensing model, so we had no experiences to learn from. It has been a trial and error process, but eventually we could set a successful example that was eventually followed by many other jurisdictions – and still is today.

The discussion around gambling is, and has always been, complex and even controversial everywhere, as there is understandable concern over the risk of an activity that should only be meant as entertainment. This concern often makes governments uncomfortable towards the regulation. In reality, because online gambling has been largely accessed for 25 years, and there is no way to block the internet, our experience has demonstrated that regulating it is the most effective way to control it and enforce, thanks to the technology, a responsible way to gamble.

I also advocated, so to speak, the cause of the regulators. My appeal was to trust and listen to the government officials, like I was myself, in charge of the sector. Gambling is a very complex business, and I believe that it is up to the people with the right skills to suggest what the best technical way to proceed is, once that the political decisions have been taken by the parliament.

What learnings could you acquire from the hearing, and what practical effects do you consider it may have on the debate over regulation options?

After the approval of the Law 13,756/2018, the matter is currently in the hands of SECAP (Secretary of Evaluation of Public Policies, Planning, Energy and Lottery, Ministry of Economy), which has the task of implementing it. But, nevertheless, I found very positive that the congressmen were willing to learn more. The political debate around gambling will always be lively. Sometimes it happens, all over the world, that those debates are purely political, indeed, and not based on factual data. In this case, a large number of industry experts was invited to share their knowledge, which shows seriousness and open-mindedness from the congressmen side. It is also likely that in the future the Law will be further improved —this has happened so many times in Europe, for instance— and I believe this knowledge can be taken into account if and when the Parliament will be asked to vote on possible amendments.

What is your personal view on the current landscape of online gaming in LatAm, and what are your prospects for Brazilian market?

Interestingly, the situation in Latin America, where only a few markets are regulated, and there is a growing discussion in others around benefits and threats of regulation, reminds me of Europe around 10 years ago, when I began my experience as a regulator. But, exactly like it happened in Europe when Italy kick-started the process, it is just a matter of time to see other countries following the example of Colombia. We already see the cases of some Argentinian jurisdictions, and soon Peru, Brazil, Paraguay, just to name a few, will follow. In the region, for instance in Mexico and Colombia, Playtech currently partners with leading brands, providing its technology for betting and gaming platforms in the retail and online channels.

As regards Brazil, the timing for it to become the world’s second-largest regulated market for online gambling, after the UK, will depend on the ability of the government, and the parliament, to further improve and complete the legislation, which at the moment includes only betting, by adding the other types of online gambling which are already commonly accessed by Brazilians, such as casino games, poker and bingo.

What learnings could you gain from your expertise as Italy's regulator that could be applied to a jurisdiction like Brazil?

Probably all my learnings, and those of all the regulators who faced the challenge of building a framework in their own country, can be applied to Brazil. While it is true that every country has its own cultural and political differences, the objectives of the regulation are exactly the same everywhere: protecting the consumers, especially the most vulnerable ones, keeping the crime out, generating tax revenues. A successful regulation is one that ensures that as much gambling as possible is practiced under the control of the State, and all the actors can benefit from it: the State indeed, for the reasons just mentioned; the citizens, who can enjoy gambling as a safe and fair entertainment activity, while being educated towards a responsible way of playing; the industry, both local and international, by being given the possibility to operate – and invest– in plain sight and according to clear and stable rules. The main learnings I shared at the hearing were: regulation is more efficient than prohibition in terms of consumer protection; a framework works better if all the popular gaming types are regulated; the right taxation model is crucial to ensure the model is successful; the importance of listening to the advice of the Brazilian regulators; and, the most important one, the adoption of truly effective responsible gambling measures, such as the ones made possible by the modern technology, to prevent problem gambling and, with it, a possible future backlash from the public opinion.

Brazilian government now has to decide between a fixed number of companies with a ‘concession’ model; or a variable and unlimited number with a ‘permission’ (authorization) model to operate sports betting. What pros and cons do you see for both cases, and which one do you find more suitable for the country?

By experience, I am firmly convinced that an unlimited number of licences is the best option, for a very simple reason: all the companies which won’t be able to operate legally in the country, will continue to target it from outside, but without paying any taxes, having to comply with the national rules, and being controlled by the State, in this way competing easily and unfairly with the local licensees. The disadvantage might be that it is more difficult for a regulator to oversee a large number of companies, but this is only partly true. In Italy we were around 10 people in the office in charge of the more than 100 online gambling licensees, and it worked relatively well. In any case, the additional effort required is more than compensated by the increased effectiveness of the framework in terms of consumer protection and additional revenues.

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“          A framework works better if all the popular gaming types are regulated. The right taxation model is crucial to ensure the model is successful

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