Brazilian Government Reveals Details Of Sports Betting Regulation
The online betting and iGaming scene in Brazil is well-established, with sports bettors having approximately 450 online sites to choose from. However, the government is now planning to revise its online betting regulations by introducing new provisions that mandate operators to establish headquarters in Brazil to operate legally. According to drapuestas.com, the proposed legislation is now in the committee stage, with the purpose of minimizing the Brazilian government treasury’s loss of tax revenue, which was caused by newly-elected President Lula da Silva’s decision to raise the country’s minimum taxation rate.
Changes in Gambling Regulation to Recuperate Tax Loss
The Ministry of Finance recently unveiled a comprehensive list of proposed modifications set to be incorporated into the forthcoming amendment to Brazilian gambling legislation. Despite the 2018 Gambling Law legalizing sports betting, the Brazilian government has suffered annual losses estimated to be between R$6 bn and R$8 bn. This loss is primarily attributed to Brazilian players utilizing offshore betting platforms that do not pay taxes in Brazil, leading to an enormous outflow of funds. According to Ministry of Finance sources, the final text of the proposal only contains betting on sports results, while Congress will later address other sorts of games.
The Minister of Finance, Fernando Haddad, has pushed for an update to the existing laws with the intention of curtailing losses from unpaid taxes. Bookmakers will bear the brunt of the levy, as companies will be required to set up shop in Brazil to provide their services to the public. According to Agencia Brasil, quoting an anonymous insider from the Ministry, the state budget will collect up to US$1.16 bn annually. If the move doesn’t scare away any of the 450 online operators, the government will rec R$7-8 bn (US$1.4 bn) per year.
National Online Sports Betting – The First Ever for Brazil
The state of Minas Gerais became the first-ever in Brazil to start its own sports betting program this February. However, this is only for a trial period as the app that the state-owned Loteria Mineira operator launched only allows bettors to try real money betting for 120 days. Based on the decision, the Brazilian government is testing the waters for allowing the states to launch their own betting operation first before opening the gates for international operators. This pilot program will show how a legal domestic betting platform can operate and provide entertainment for domestic citizens.
It is certain that the Ministry of Finance will no longer tolerate lost tax revenue as an increasing number of Brazilians are interested in sports betting. This regulation is long overdue, denying the Brazilian budget billions of reals that can be used to boost the economy. However, the proposed changes in the online gambling and betting regulation contain a clause that will limit the scope of betting options, which is likely out of consideration of the large Evangelical base in the country, which opposed gambling on moral and religious grounds.
Although details are scarce, the media says that the draft legislation will permit sports betting. It remains to be seen whether bets inside bets will be permitted in addition to other betting possibilities such as the number of goals and combinations of results and goals/points scored.
Following the formal start in Minas Gerais, Brazil’s second most populous state, two other states, Rio de Janeiro and Paraba, are anticipated to follow suit through their respective state lotteries.
Brazilian Officials Urging President to Pass Law
Current and previous Government officials who are familiar with researching and formulating betting and gambling regulations are trying to find the best way to proceed with the intended changes. One recommended option is for the President to pass Law 13,1756 by decree.
According to economist Alexandre Manoel, tasked with gambling and betting legislation under president Temer, the government must act fast. There are serious indications that sites are on the verge of legality and pirate sites continue to harm bettors in the country.
It is evident that Brazilian sports clubs, especially football clubs, have benefitted from betting sites’ sponsorships. Still, the general population needs legal, regulated sites and a regulating body where they can lodge a complaint. And the yet unregulated law still prevents the government from collecting taxes from betting as intended.