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On August 20th, Pietro Cardia Lorenzoni, Legal Director of the National Association of Games and Lotteries (ANJL), participated in a public hearing at Brazil’s Chamber of Deputies on regulation and the fight against illegal betting.
Throughout all his words, Lorenzoni underlined that the illegal betting market generates significant damage to the country. He estimated that underground activities generate between BRL 6 billion and BRL 8 billion in lost taxation. Beyond tax damage, the shadow market also generates over-indebtedness, social harm, and unauthorized access by young people and minors to games, which are prohibited in the controlled environment.
Concerns About Tax Allocation and Effectiveness
One of Lorenzoni’s key points was the allocation of the supervision fee. He stressed that these resources must be properly directed to the Ministry of Finance to ensure effective regulatory enforcement. Without adequate funding, he warned, the entire regulatory structure risks being compromised.
He also put forward plans to improve the long-term viability of the gambling industry. These included regulation of technology providers and websites, stronger action to dissuade and forestall illegal websites, regulation of payment channels used by clandestine operators, and greater regulation of advertising trends.
The Role of Advertising in Emerging Markets
Lorenzoni emphasized the current empirical debate regarding advertising boundaries. For him, although advertising boundaries can be effective in mature markets, they can function oppositely in emerging markets.
“In several cases, the Legislative House assumes that restricting advertising is beneficial; however, this is only true in consolidated markets. In England, for example, there are more than 60 years of regulatory experience, which allows them to impose restrictions,” he explained.” he explained.
He cautioned that in emerging markets such as Brazil, limiting advertising could unintentionally empower illegal operators. “The gambler does not know which market is legal and which is not“, Lorenzoni continued, referencing the risk of pushing players to unregulated alternatives.
Tax Burden and International Comparisons
The ANJL director also mentioned taxation of the betting industry since he indicated that it is already above 30%. In his view, any further rise would cause revenue to fall rather than rise.
“International experience shows that the increase in tax burden reduces tax revenue. That is economic science; that is what happened with the Netherlands, whose tax burden rose from 30.4% to 34.2% and whose tax revenue fell 9%. The same will happen in Brazil if the Provisional Measure passes in its current shape with an 18% rate for GGR“, Lorenzoni explained.
Broad Participation and Institutional Dialogue
It was also highlighted by the input of Giovanni Rocco Neto, National Secretary of Sports Betting and Economic Development in Sport at the Ministry of Sport (SNAEDE); André Lartigau Wainer, monitoring and prevention coordinator of money laundering at the Ministry of Finance; and Fernando Vieira, Executive President of the Brazilian Institute of Responsible Gaming.
Some of the other attendees were Diego Perez, President of the Brazilian Association of Fintechs (ABFintechs); Marcel Fleury Pinto, process coordinator, Superintendence of Oversight of the National Telecommunications Agency (participating via videoconference); and representatives from industry and regulatory associations.
The meeting was organized by the Subcommittee on Regulation of Sports Betting, headed by Deputy Caio Vianna. The discussion reflected Brazil’s growing necessity to balance regulation, sustainability, and sustainable development in light of the pervasive threat of unlawful gambling.
Source: YogoNet
