The regulation of sports betting must happen in Brazil. Law 13,756, which allowed fixed odds betting (as sports betting is known), was sanctioned by then President Michel Temer and stipulated a period of two years (extendable for another two years) for the sector to be regulated.
The topic was pending during the four years of Jair Bolsonaro and did not advance. Now, the Ministry of Finance is preparing the provisional measure to define the operating rules for companies in this market in the national territory.
Points of sports betting regulation in Brazil
According to industry projections, the segment already moves R$ 150 billion per year. Bookmakers invested around BRL 3 billion in sponsorships and advertising.
The federal government is waiting for analyzes by consultants to measure these values more accurately, which position Brazil as the second largest market in the world, behind only the United Kingdom.
With the formalization of the regulation of sports betting, the Ministry of Finance believes that between 70 and 100 companies will officially enter the country. Today, there are no reliable statistics on the number of players in the country.
A survey by Máquina do Esporte, which only considered betting platforms with a Portuguese version, points to the existence of 189 companies. Platforms with other types of games, such as casino, bingo or online raffle, were not included in this survey.
Depending on the criteria, the total number of companies operating in the country varies between 400 and 500 players. According to other market sources, the number would be between 700 and 1,000 companies.
To operate in Brazil, companies will have to pay a grant fee. According to Máquina do Esporte, the federal government works with a value between R$ 22 million and R$ 30 million for a five-year license.
The intention is that, at this first moment, the license will be for five years so that the government can monitor how the legalized market develops. If you feel confident providing longer licenses, the renewal can be for ten years.
The value of BRL 22 million is how much the draft of the decree that the previous government had prepared, but which was not signed by Jair Bolsonaro, was proposed. The current government understands that this value is outdated. However, the maximum expected rate, of R$ 30 million, is seen as high by market representatives.
“If you don’t give everyone the opportunity to become legal, the result is that a good part of the demand will not come to the regulated market and will not generate taxes”, argued Luiz Felipe Maia, from Maia Yoshiyasu Advogados to Máquina do Esporte.
Abroad, rates are usually lower. The only exception is the United Kingdom. Largest market in the world, companies even pay an annual fee that can be £ 1,077,027 (R $ 6,883,420.56, at current quotations), if the betting platform moves £ 1 billion or more (R $ 6 .39 billion or more).
If the betting company fits this level, it would pay, in five years, £ 5,385,135 (R$ 34,417,102.82), an amount even higher than that studied for Brazil. In the United States, gambling legislation is done at the state level. To operate in several states, it is necessary to pay fees in each local market.
The taxation of bookmakers would be similar to that of a conventional company. The legislation establishes the payment of 0.10% of the collection of bets made in the physical medium and 0.05% in the online one. There is also the payment of PIS/Cofins of 9.25% and Tax on Services (ISS), which can vary from 2% to 5%, depending on where the company is based.
“This is about 19%, which is the world average. The problem is that, in Brazil, taxation on profits is very high compared to other countries with gambling legislation like Malta”, said Maia.
Another tax will be levied on the gambler, who will pay tax on the prizes he wins in the bets. “The well-regulated markets abroad, which have the best international practices, have no taxation on the bettor”, criticized Udo Seckelmann, head of the Web3 & gaming department at Bichara e Motta.
The money raised from the granting fees will be used to create a regulatory agency for the betting sector. This autarchy will be responsible for combating money laundering related to the sector, investigating unusual bets and preparing campaigns on responsible gambling.
It will also be up to the new regulatory body to examine the documentation of companies that apply for a license to operate in Brazil.
Fight against illegality
Anyone who does not comply with sports betting regulations will have problems operating in Brazil. The Federal Government intends to veto these companies from adopting more common forms of payment, such as Pix and bank slip. It will also be difficult for the bettor to receive his prize on a platform that is not legalized in Brazil.
Another initiative is awareness campaigns, as the customer who bets on legalized sites will be helping the heart club, which is entitled to receive part of the amount collected.
In addition, the growth of the national industry will open new jobs. Currently, bookmakers carry out their work from abroad. The Ministry of Finance still does not have an estimate of how many jobs sports betting regulation will generate across the country.