“Next year will be the year of consolidation for the gambling market in Brazil,” said lawyer Udo Seckelmann, head of the Gambling and Crypto department at Bichara e Motta Advogados law firm. He talked to SiGMA News about the upcoming gambling regulation, responsible gambling, cryptocurrencies, challenges, and opportunities ahead.

For the past few years, Seckelmann has been helping operators onshore their companies in Brazil, bringing their operations and funds to the country, and helping other market players comply with the new regulation. “These past two years have been learning years, adapting years to the new regulations; we were all adjusting, even the regulators, and next year will be a year of consolidating these new regulations. Brazil is finally regulating this sector, something we have been looking forward to for a long time,” he said.

He affirms that part of this consolidation is hiring Brazilian staff in the new onshore companies. The newly regulated market will generate new job postings and ask for people to specialise in this field. 

An upcoming step will be to consolidate understanding with the regulator. “The companies will begin to see what the regulator will demand, inspect and regulate,” he said. The big challenge is there is no past jurisdiction to compare to. “In this case, we do not have jurisdiction yet for the gambling market. So everyone is learning together and doing, including the regulator,” he said.

National companies

Seckelmann also has national operators as clients. He said the big difference between the big international operators and the local ones is that, legally, foreign companies have some benefits because they have all the expertise from other markets. “Many times, foreign operators have more experience in terms of operation because they have the expertise from other jurisdictions,” he mentioned.

On the other hand, Brazilian companies have the savoir-faire of doing business in Brazil. “Everything has its pros and cons. So, when it is a Brazilian operator, they know how to do business with Brazilians and how to behave, and that is a facilitator because, as we know, Brazil is not for amateurs,” he said.

Responsible advertising

The lawyer said he also has influencers and affiliates as clients, searching for responsible ways to advertise for this market. “In the betting ecosystem, there are many players: influencers, tipsters, affiliates. It can be any person who wants to advertise betting companies and get paid for it. Football players, poker players, famous people, niche influencers.” 

Lately, influencers have been concerned about betting advertising because it may involve administrative, civil, and even criminal punishments and responsibilities. “The way to advertise a betting company might be crucial for the influencer to be on the right side, advertising responsibly, following the rules and parameters required from SPA or the CONAR code.” SPA is the Prizes and Betting Secretariat, of the Ministry of Finance, and CONAR is the National Advertising Self-Regulation Council.

On the other hand, if the influencer does not include the warning clauses, for example, or the correct language and follow the rules, you end up risking being penalised, and being held administratively, civilly, and even criminally liable.

Cryptocurrency and regulation

Brazil is in the public query stage of regulating crypto. According to Seckelmann, it should be regulated next year or 2026, at most. But even while it is not regulated, Brazilians can buy crypto. 

“We know technology advances in a much faster way than the law. The biggest difference I see comparing crypto and the gambling market is that the gambling market has a clear international experience. Jurisdictions will regulate it according to the consolidated markets, and we can identify the good and bad and bring it to our own.” 

“But when it comes to crypto, everybody is learning while they’re doing it. The technology arrived and started to evolve. So numerous countries are looking to regulate it in a way that there is some control over it,” he said. Brazil is facing this challenge now.

The Brazilian central bank, which will be the crypto regulator, is doing public consultations about it and has started to listen to the population and the sector concerning regulation. Crypto regulation, according to the lawyer, would attract investments to Brazil, bring in more taxes, and consumer protection. It would also help to reduce scams involving crypto.

The risk of prohibition

According to the lawyer, there are still lawsuits and direct action of constitutionality in the Federal Supreme Court (STF) about to be judged about the online gambling market.

“STF will have to decide whether or not this request for the unconditional nature of the betting law is valid. So there is that. It is a real danger. And to me, It would be a huge mistake to declare it unconstitutional,” he said.

The problems attached to this sector are there because gambling was legalised in 2018, but it was not regulated for six years. “The activity has been legalised for six years, but there would be no regulatory body to prevent certain practices from happening. The government remained inactive for several years, and now it is finally managing to regulate it.”

“What we usually talk about in the industry is to separate the diamonds from the dirt. Yes, obviously there are adventurous, not serious operators using the lack of regulation to exploit it in a completely deceptive and completely unfair way. These operators tarnish an entire industry because of these illegal practices. But there are serious businesses, many of which have open capital on the stock exchange in other countries,” he said.

Regulating the market is the best alternative

To Seckelmann, the gambling industry is an economic activity like any other. “If you leave it unregulated and without effective supervision, there will be adventurers who will use it for criminal practices. If you regulate effectively, you can significantly mitigate this type of practice and also attract investment, generate jobs, generate taxes for Brazil.”

The lawyer also mentioned betting companies sponsoring football clubs, which is benefiting the sector, with large amounts of money entering the clubs.

“With illegality, it would be basically like sweeping dust under the rug.”

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