General elections and gambling legalization in Brazil, EU to strengthen money laundering rules

Betting news of the world with Legalbet and 4H

In our latest issue of the international news Michel Reznik, Head of Banking and Payments in the 4H agency joins Ivan Kurochkin to comment on the events.

Europe

The European Gaming and Betting Association (EGBA) external linkExternal links are prohibited the consistent application of anti money laundering (AML) rules across all the EU territories. The European Commission launched consultations over the legislative proposals to strengthen AML in July this year. According to the proposals a new centralized body Anti-Money Laundering Authority (AMLA) should launch in the EU. It will cover all countries across the European Union.

New black and grey lists external linkExternal links are prohibited to define the countries that have the highest money laundering risks. Cash payments will be limited to €10,000, and existing AML controls will be extended to the crypto assets sector.

The EGBA welcomed the fact that gambling was included in the proposals. The association is ready to support the first pan European guidelines for tackling money laundering in online gambling. The EGBA believes that Europe lacks such control now. The EGBA added that the roles of the AMLA and national authorities should be clearly divided in order to prevent duplicate reporting, which in turn could reduce administrative and compliance costs.

Ivan Kurochkin’s comments

The most significant part is that the new package of legislation is quite substantial. In the past, the EU were trying to improve their AML measures with a set of directives, of which there were 5 in the past. A "directive" is a legislative act that sets out a goal that all EU countries must achieve. However, it is up to the individual countries to devise their own laws on how to reach these goals.

With the new legislative package, the EU issues a new, 6th Directive, having announced the creation of a dedicated EU Anti-Money Laundering Authority as well as mandating some of the provisions of the previous 5th directive to be transposed into national law, such as rules on national supervisors and financial intelligence units in Member States.

Another important aspect when it comes to the EGBA’s relationship with EU legislators is that inclusion of gambling in the legislative package also opens the way for EGBA to offer more assistance to the EU with such aspects like AML measures, as gambling has a long and challenging history of dealing with the risks of the fraudulent financial activity and in some respects, using the lessons learned in gambling regulation may offer additional ways to improve the overall AML measures and regulations in the EU.

Brazil

The lower house of the Brazilian parliament (Chamber of Deputies) external linkExternal links are prohibited the proposals on gambling legalization. The initiative has been discussed for a long time in the country. It used to be supported by the government. However, the idea was contradicted by the Evangelical part of the authorities, and the Brazilian president Jair Bolsonaro said that the bill would not become a law this year anyway.

A portion of the senators still strongly support the legalization and regulation of gambling in Brazil. They created a working group and a new document to support the initiative. The new project brings changes from the original text to reduce criticism of the lack of inspection, association with criminal organizations and health risks due to gambling addiction.

Another thing mentioned in the document is that the authorization for the operation of gambling companies can only be given by a special regulatory body instead of the local authorities as it was proposed earlier. The authors believe that all these things will make the regulation more rigid and with more inspection.

Michel Reznik’s comments.

We welcome every initiative of the state to legalize and regulate gambling, as news comes from Brazil about their current efforts to push for creation of a regulated legal gambling market.

The situation with this particular initiative by the Brazilian legislators looks promising, but has a lot of bridges to cross before it even gets to the Parliament for the vote.

For now the chances of success can be guessed at being around 50/50. The situation needs constant monitoring and a more focused approach, so it wouldn’t be a surprise to see more news come out of Brazil before the year’s end.

World

The International Betting Integrity Association (IBIA) external linkExternal links are prohibited betting leadership that a lack of governance of friendly football matches is being exploited by criminal gangs.

New research by the University of Nicosia has revealed that more than 250 friendly matches involving European clubs showed signs of suspicious activity during the recorded period of 2016 to 2020. A survey undertaken on 700 players based in Cyprus, Greece and Malta, revealed that more than a quarter of participants (26.5%) had played in a friendly match that they suspected to be manipulated.

Unlike competitive matches, which are usually covered by agreements between data companies and competition organisers, friendlies are a free-for-all. The lack of oversight combined with the availability of friendly football matches on unregulated operators based in Curaçao and the Philippines has left games exposed to match-fixing.

Ivan Kurochkin’s comments

It seems that the International Betting Integrity Association’s (IBIA) research hints on the absence of any control over match fixing in Europe.

Based on the text of the article, currently friendly football matches exist in some kind of “limbo” - on the one hand, large European organizations like UEFA do not exercise control over the friendly matches, with sports betting operators, on the other hand, offering betting options for such matches shifting all the risks associated with betting in such game to their clients. Moreover, the officials of the club or the players themselves often become responsible for match fixing.

Fixing a match in the official tournaments is strictly prohibited and responsibility for compliance with the rules of fair play falls, among other things, on the organization acting as the executive body of the tournament. For example, UEFA has been working closely with Sportradar, a bet monitoring company for 12 years, to safeguard the integrity of UEFA and its members' competition in order to eliminate match-fixing from sport.

Perhaps the result of the publication of the IBIA report will be an increase in the cooperation of European football organizations with services such as Sportradar to ensure fair play, or perhaps the recent plans of UEFA to increase the number of tournaments will lead to a decrease in the number of friendly matches. In case this doesn’t improve the situation, it is quite possible to expect the introduction of a ban on accepting bets in all friendly matches.

Italy

Italian gaming revenue external linkExternal links are prohibited 1.2% year-on-year in October, as a strong performance from online casinos was offset by a decline in sports betting’s contribution. Online revenue for the month came to €243.9m, marginally behind October 2020 but also a dip of 11.9% compared to September 2021’s total. The majority of this total came from online casinos, which accounted for €148.8m, the strongest month since May this year.

While casino revenue was up year-on-year, sports betting’s contribution across all channels dropped significantly, to €117.9m. This represented a 51.6% drop from the prior year, and a 37.1% decline from September 2021. This could be attributed to online betting, which posted revenue of €76.1m, the second lowest total of 2021 to date.

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