With the aim of bringing security to consumers and companies, Bill 3626/23, which provides for the regulation of sports betting through a fixed quota in Brazil, had its basic text approved on Wednesday night (13) at Chamber of Deputies. The text incorporates Provisional Measure (PM) 1182/23, published in July this year. The next step is forwarding it to a vote in the Federal Senate.
According to the substitute presented, instead of 10% of the revenue going to social security, as predicted by the PM, the sector will receive 2%. Other recipients of the resources will be education (1.82%), sport (6.63%) and tourism (5%).
The expectation of the Ministry of Finance is that the regulation will be valid from 2024 and it will be possible to start the authorization processes for operators next year as well. Furthermore, it is estimated that up to R$12 billion (US$ 2.45bn) will be raised by regulating the betting market.
For experts in Gaming and Betting Law, the country tends to be one of the references in regulating sports betting markets in the world.
“Brazil positions itself as one of the main regulated markets in the world. Even with a reduction in the number of legal operators, it is a very interesting potential market, with a very good possibility of Brazilian economic development. In Latin America, we have established ourselves as the main betting market on the continent,” argues Filipe Senna, partner at Jantalia Advogados and specialist in Gaming Law.
In the same way, Tiago Gomes, partner at Ambiel Advogados and specialist in Business Law and Gaming and Betting Regulation, the regulation of the sector in Brazil is an inevitable and sustainable path for the market.
“It would be a mistake to assume that the Ministry of Finance had the option of not regulating betting, given the text of article 29, §3, of Law 13,756/2018. There is a mandatory rule that determines that the Ministry of Finance regulates the operation of fixed-odd betting in Brazil, so it does not seem to me that it would be an option not to do so,” he pondered.
No less important, bettors will have more security and reliability in the industry, if the bill is sanctioned. “Both the PM and Bill bring criteria beyond taxation. Among them, the issue of consumer protection and the guarantee of Consumer Rights, mainly in the Bill, in which many players and bettors had difficulty in demanding possible rights, payments and questioning problems with sports betting operators,” highlights Senna.
Points provided for in Bill 3626/23:
1) Taxation of companies: There will be a rate of 18% on the GGR – Gross Gaming Revenue – which corresponds to the gross revenue of these sports betting operators. There was a lot of discussion about taxation, with companies defending a lower one. “The value of 12% was considered, but the Bill was published with a tax of 18% on sports betting operators. Regarding the bettor, those who exceed a winning of approximately R$2,000 will be taxed at 30% in relation to income tax on these winnings,” explains Filipe Senna.
2) Creation of a ‘physical casino’: the creation of a physical casino focused only on online games will be permitted, with limitations. Authorization for operations, according to Tiago Gomes, specialist in Gaming and Betting Regulation, was a concern for the sector. “This is because 60% of betting houses’ current revenue comes from this modality, which is currently prohibited in Brazil.”
3) Bets not withdrawn: prizes not withdrawn by bet winners will be allocated to the National Public Calamity Fund and the Student Financing Fund (FIES).
Source: GMB
