Brazil’s New Gambling Watchdog to Include Salaried Police Officers

Posted on: August 15, 2023, 07:46h. 

Last updated on: August 15, 2023, 09:23h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

In the wake of the match-fixing scandal that’s still permeating Brazil’s sports ecosystem, along with the arrival of regulated sports betting, changes are coming. One includes the creation of a new government watchdog to oversee gambling that will have federal police officers and financial investigators on its payroll.

Brazil's national flag waving over Rio de Janeiro
Brazil’s national flag waving over Rio de Janeiro. A new gaming regulator will help the country quickly achieve maturity with its launch of regulated sports betting. (Image: Getty Images)

After the publication of the provisional measure to regulate sports betting in the country, the Brazilian government is advancing the project. The inauguration of the National Secretariat of Prizes and Bets (SNPA, for its Portuguese acronym) will ensure compliance with gambling and betting standards and lead the fight against illegal gambling.

The SNPA will report directly to the Ministry of Finance, currently led by Fernando Haddad, the primary author of the provisional measure. In addition to employing police and financial investigators, it will also lead to new employment opportunities for others.

A New Era of Brazilian Gaming

The watchdog will include four divisions, Accreditation, Supervision, Vigilance, and Sanctions. There will be at least 54 jobs, 60% of which have already been defined, according to a Ministry of Finance statement. However, some people within the Ministry are lobbying for the approval of more positions.

The SNPA will, at least at first, have a modest operating budget. It will cost around BRL4 million (US$815,000) to run in its first year, enough to cover the equipment it needs and its staff.

The agency will include police officers who are currently part of the Federal Police, as well as members of the Council for the Control of Financial Activities (COAF, for its Portuguese acronym). What the Ministry didn’t clarify is if their salaries were part of the SNPA’s budget, or if they’ll continue to be covered by the respective government departments.

By including the police officers, the SNPA will have the immediate support of law enforcement, where needed, in the event it has to break up an illegal betting operation. At the same time, COAF agents will be on the front lines, where they have greater access to data to analyze financial movements to detect and prevent money laundering.

Brazil is facing a global scandal after accusations surfaced that a number of soccer players at all levels, and at least one club president, were allegedly part of a match-fixing ring. The SNPA will be able to work with other government entities to uncover criminal activity in sports and help Brazil get its regulated sports betting market on the right track.

The betting scandal has made its way to FIFA as well. The Brazilian Football Confederation has asked it to ban any Brazilian player from playing at the global level.

Taxes, Fees No Deterrent

The provisional measure leading to regulated sports betting in Brazil includes a gross gaming revenue tax rate of 18%, which is much higher than the original 5% many operators had expected. The spike hasn’t impressed gaming companies or some lawmakers, but it hasn’t been a deterrent to entry, either.

The cost of a sports betting license in Brazil is BRL30 million (US$6 million). So far, according to the Ministry of Finance, at least 70 companies have indicated that they would submit an application for a license, which could be granted for between five to 10 years.

The expectation is that Brazil will become an attractive market, based on regulation. With the regulation of bets alone, the government expects to raise BRL2 billion (US$407 million) in 2024, but the value should increase over the years. The most optimistic forecast puts the potential revenue at five times that amount.