Brazil Could See Sports Betting Regulations Arrive this Week
After years of waiting, as well as an intentional block by former President Jair Bolsonaro, Brazil could finally see the arrival of online sports betting regulations this week. It’s not yet a done deal, but the cards are on the table.
Senator Jorge Kajuru said on May 4 that the government will submit for analysis by the National Congress a proposal to regulate and tax sportsbooks “in the coming days.” That could mean that the analysis will be ready sometime this week.
The changes will be made via a provisional measure and can be implemented almost immediately. They still need approval from lawmakers, which could take up to six months.
Brazilian Sports Betting Finally Advances
Kajuru explained in a statement that he will be the sponsor of the legislative measure. The lawmaker authored the bill with Senator Hamilton Mourão, setting down the rules for companies to offer betting services in the country.
The legislator suggests a slightly softer approach than that of the government’s economic team, led by the Minister of Finance, Fernando Haddad. Haddad, who recently announced a tax plan for sports betting operators, wants online betting operators to pay BRL30 million (US$6.05 million) for a five-year license.
Kajuru believes Haddad’s plan isn’t viable. He asserts that operators want to be part of the industry, but don’t want to pay “astronomical, abysmal” fees. Therefore, he wants a license fee that is proportionate to the size of each operator. Kajuru added that Haddad appears to be amenable to the change.
If nothing else changes, the sportsbooks will have to give up 15% of the total they collect to the government. This figure will be calculated against the operator’s gross gaming revenue, which deducts all payouts from the total revenue.
The senator also said that he intends to include the regulation of advertising for sports betting, with the intention of reducing the possibility of gambling addiction. He doesn’t want to restrict the market with exaggerated rules that might have the opposite effect and not raise responsible gambling awareness.
The processing of any provisionary measure in Brazil’s legislation begins in the Chamber of Deputies, as did the sports betting bill. It made it to the Senate, where it has sat for almost a year.
Fine-tuning the Process
To obtain accreditation and operate legally in the country, companies will have to meet a series of requirements in addition to the license fee. They will have to maintain their headquarters in Brazil, have a minimum capital of BRL100,000 (US$20,190), and obtain certificates of payment methods used and systems to avoid manipulation of results.
Companies will also continue to pay other taxes normally, such as the Corporate Income Tax, Social Security Financing Contribution, and others. These are all calculated based on the gross revenue.
In addition to the topic of sports betting legislation, lawmakers will also likely address the country’s General Sports Law. A proposal on the table repeals several laws that deal with the sports industry and creates new subsegments. Among the novelties, the proposal, written by a Senate panel, defines sports as an “activity of high social interest.”
Haddad said last week that the approval now only depends on the endorsement of President Luiz Inácio Lula da Silva.
