How will Lula’s return impact Brazilian gambling legislation?

“They tried to bury me alive and here I am,” cried Luiz Inácio Lula da Silva as he began his victory speech after a stunning comeback saw him oust Jair Bolsonaro to become Brazil’s President once again.

In a tightly fought contest between the left winger and the far-right incumbent, Lula secured 50.9% of the vote to bring an end to Bolsonaro’s controversial time in office.

Lula, who previously served two terms in office between January 2003 and December 2010, will once again become President on 1 January 2023.

The 77-year-old former metalworker spent 580 days in jail before his conviction over being found guilty of taking bribes was annulled, allowing him to return to politics and secure victory.

And while there are serious issues to be dealt with in Brazil, including bringing millions out of hunger and protecting the Amazon following Bolsonaro’s blasé attitude to climate change, attention has been piqued in gambling circles for what Lula’s return may well mean for the industry.

Brazil has long been earmarked as a sleeping giant, with no formal regulation in place, but the grey market has continued to attract heavy hitters such as Entain and bet365.

With a football obsessed population of 214 million, tails are wagging at the prospect. Bolsonaro, who leant on a staunch evangelical supporter base opposed to gambling, had been reluctant to wave through legislation, much to the displeasure of the industry.

However, Lula has previously indicated his intentions to legalise sports betting and online gambling, with the potential tax receipts for the Brazilian government also a likely boon.

As it stands, Law No. 13,756/18, which centres around the regulations for fixed-odds sports betting, is awaiting presidential approval.

Additionally, Bill of Law No. 442/1991, which aims to legalise all forms of land-based and online gaming is in the pipeline.

While there is hope Lula will be able to usher in a new era in Brazil, lawmakers close to Bolsonaro won a majority in the Brazilian congress – signalling potential delays in a fraught political atmosphere.

EGR spoke to several Latam experts about their thoughts on Lula’s return and what it could mean for future legislation.

Somos milhões no Brasil da esperança! #tbt de alguns dos atos de rua pelo país nessa campanha. Você participou? 🇧🇷🦑 #EquipeLula

📸: @ricardostuckert pic.twitter.com/QWJr4Xmcid

— Lula (@LulaOficial) November 3, 2022

Neil Montgomery – Montgomery & Associados, managing partner

“As far as the gaming industry is concerned, it will probably see less resistance on the legislative front moving forward. With Bolsonaro on his way out on 31 December, there is no reason for him not to issue the presidential decree regulating Law No. 13,756/2018 within the legal deadline of 12 December, especially since its text seems to be ready. It could be one of his legacies.

“We should also see acceleration at Congress for approving Bill of Law No. 442/1991, especially now that the President, who openly said he would veto the bill, will no longer remain in power.

The change of administration, however, will certainly affect the ordinary course at ministerial level and at public companies like Caixa, since the first few months of the new administration will certainly result in changes at the top executive levels. This can delay the licensing process for sports betting operators if the 2018 law is now indeed regulated.”

Miguel Angel Bueno Jimenez – Igaming consultant

“Everyone is aware that online gambling in all its variants is a social demand in leisure and entertainment and that this demand in unregulated markets is being covered by clandestine or unregulated gambling. It is the obligation of the regulators to regulate this situation for several reasons, including stopping problem gambling, giving players guarantees and tax receipts.

“Everyone knows that Bolsonaro was against face-to-face gambling and wanted to limit online gambling, but it has been shown that these positions are not valid at the present time due to the ease of technology to access online gambling.

“With the arrival of Lula in power, more aligned with the liberalisation policy of Argentina, for example, he must regulate the industry as a whole, be more liberal and also take advantage of this source of income for the Brazilian public coffers.

“I think that Lula will give a boost to the legalisation of gambling in Brazil and align himself with the countries around him. This does not mean that it has to be done in a disorderly manner and in a hurry because this would lead to losing focus on the problems of the three factors that I indicated earlier.

“However, much remains to be said about the licensing model that the Brazilian government adopts, not only for operators to opt for licences, but also for their investments to be profitable through the control and closure of clandestine gambling websites (already deeply rooted in the country) and avoid unfair competition.”

Luis Jiménez – Condor Gaming, Latam regional manager

“Lula’s positioning regarding regulation of markets remains a mystery and no one can be sure as to how it is nowadays. Even though in past elections he expressed the will to regulate, this topic became a banned subject in his administration after a few corruption scandals.

“We have to keep in mind that corruption image, still his major Achilles heel, for at least half of the Brazilian population. One thing is sure, Bolsonaro’s administration wasn’t very keen to regulate as it would create a big problem for his religious supporters. So ,perhaps Lula’s victory can be a fresh chance for regulations. At least the regulation lobbyists won’t face an unbreakable wall, as Lula has committed to respect the Bolsonaro government’s policies regarding this (according to a Congress source).

“Lula’s administration will face several urgent matters before even looking at gambling regulations. The consolidation of his power and government should be the first one, as we are witnessing riots by Bolsonaro’s supporters who don’t accept Lula’s victory.

“However, the Congress should send the regulatory framework to Bolsonaro for approval this year and, as said, Lula has committed to respect this. Lula is well aware that regulations will bring new work positions for Brazilians and billions in taxes for the government.

“Most of the acceleration on regulation relies on Bolsonaro’s sanction before the end of the year. If this happens as expected, we should see a really positive scenario for regulation. If not, the regulation will fall asleep for years as usual. We shouldn’t see big changes before the World Cup, summer, and finally Carnival. At the end of the day, in Brazil, anything and nothing can happen.”

I send my congratulations to Luiz Inácio Lula da Silva on his election to be the next president of Brazil following free, fair, and credible elections. I look forward to working together to continue the cooperation between our two countries in the months and years ahead.

— President Biden (@POTUS) October 31, 2022

Magnho Jose – Instituto Brasileiro Jogo Legal, president

“I believe that Lula’s election could represent an advance in the legalisation of games. Currently, PL 442/91 that legalises casino, bingo, animal games and online games and which was approved by the Chamber of Deputies in February this year is in the Senate awaiting the definition of rapporteur and procedure.

“One of the advantages is that President Bolsonaro had promised to veto the project approved by the National Congress and President Lula promises to sanction it.

“We still don’t have elements to define whether the victory of former President Lula could accelerate the regulation of sports betting. I believe that a week from now we will have a better defined scenario after the maturing of the defeat of President Jair Bolsonaro. The regulation of sports betting does not depend on the National Congress, it depends on the President to issue the regulatory decree. There is already a draft of this rule and it was not published before the elections because the President responded to the request of a deputy pastor.”