Brazil on Cusp of Sports Betting Liberalization

Last week, The Brazilian Senate and National Congress upper house brought South America’s largest nation one step closer to legalized sports wagering, having approved the Provisional Measure 846/18 – a legislation that gives the green light to land-based and online betting.

Massive Market Means Massive Job Ahead

Brazil’s Chamber of Deputies’ lower house committee has ratified the measure that would distribute the revenue collected by Loterias Caixa – the country’s national lottery. This act will also provide a two-year period during which Congress will form legal framework for allowing private and foreign operators to be licensed and taxed for their services.

The Measure will now be ed to President, Michel Temer, which will be a pure formality, since he said that he would sign any gambling legislation that reaches him.

Brazil is one of the ten most economically developed countries of the world and with a population of over 200 million people, liberalization of sports betting would create a market second only to that of USA in size – which was also very recently kickstarted, albeit not in all states.

Who Gets What

Regarding tax structure, the minutiae of the proposed act suggest that land-based betting operators will pay back 80% of the wagered amounts to players as winnings. The operators will be allowed to keep only 14% for cost coverage.

The remaining six percent will be distributed as follows:

2.5% goes to National Public Security Force, 2% goes to football clubs whose branding operators will use to promote their games, 1% goes to public schools and 0.5% goes to social security fund.

In the case of online betting, things will be slightly different, figures-wise. Operators will need to pay 89% of wagers as winnings and will be keeping 8%. From them, National Public Security Force and football clubs will get 1% each, schools will get 0.75% and social security – 0.25%.

Responsibility is on Finance Sector’s Shoulders

Measure’s author is Senator Flexa Ribeiro and his reasoning behind coming up with this act is that the Government could reclaim the country’s offshore gambling market’s share which is believed to be about €990 million.

There still remains some technicalities to be worked out, such as the number of licenses the country will hand out to interested operators. The responsibility of regulating the gambling sector and collecting taxes as outlined above will be on Brazil’s Ministry of Finance.

An Initiative for online gambling legalization slots hall in the city of Porto Allegre has been instructed to close for business having been raided by police three times after allegations that the venue was offering illegal real-money bets to its players.

Source:

“Brazilian Senate approves sports betting measure”, igamingbusiness.com, November 23, 2018.