Bookmakers not headquartered in Brazil will not be able to sponsor sports clubs and teams
Photo: Pedro Souza / Atlético-MG

The Ministry of Finance is finalizing the details of a Provisional Measure (MP) to regulate sports betting in the country. The legislation must provide that bookmakers will need to establish themselves in Brazil to continue operating legally. Otherwise, they will not be able to form partnerships with sports teams, leagues and other entities in the sector.

Sports betting is legal in Brazil by law 13.756/18, but there is no regulation to the law. As a result, all sites operating in Brazil are hosted in other countries. Since its release in December 2018, the market has grown and bookmakers have become the main sponsors in Brazil, having agreements with 19 of the 20 clubs in Série A of the Brazilian Championship.

Bookmakers must have websites hosted in Brazil

The federal government announced that it should regulate the law via MP. According to Uol, the text will determine that any site that is not formalized in Brazil that receives bets from IPs (electronic addresses) in the country will be carrying out an illegal activity.

In this way, the federal government’s prediction is that competition regulations veto agreements and exposure for brands that are not duly registered in the national territory.

There will be a tax on economic activity, as the Minister of Finance, Fernando Haddad, has already announced. The type of tax to be paid for betting has not yet been established: an agreement with the Federal Revenue will be required. This is the missing element to complete the text of the new PM.

In addition, bookmakers will be required to comply with certain rules to combat match-fixing and encourage responsible gaming. The procedures will be made official through an ordinance after the MP.

There were negotiations with the CBF (Brazilian Football Confederation) and with the COB (Brazilian Olympic Committee) to understand which points could be inserted in the text to combat fraud.