Sports betting regulation is turning into a real ‘soap opera’. The segment is still waiting for the federal government to define the legislation that will be applied in Brazil. By Law 13.756/2018, there was a period of four years for this to be fulfilled.
However, the regulatory process did not advance during the government of Jair Bolsonaro. Now, the Ministry of Finance is showing signs that it intends to tax sports betting to compensate for the increase in the Income Tax exemption.
According to Minister Fernando Haddad, the regulation of sports betting is being prepared via a provisional measure (MP) to be sent to Congress in April. Today, Brazil is seen as the second largest sports betting market in the world, only behind the United Kingdom.
The situation was detailed in an analysis by Adalberto Leister Filho, from the Máquina do Esporte website. Check out the full text:
Betting regulations cannot become an endless debate
Sports betting regulation has become a never-ending soap opera. The sector still waits for the federal government to establish the legislation that will be followed in the country. By Law 13.756/2018, there was a period of four years for this to be done. Nothing has advanced as much in the government of Michel Temer as in that of Jair Bolsonaro.
Entering the fourth month of Lula’s government, apparently there was a boost: to offset some tax losses, the Ministry of Finance showed that taxing sports betting would be one of the forms of financial compensation. A group was created to study international legislation and seek the best model for Brazil.
Currently, the country is seen as the second largest sports betting market on the planet, behind only the United Kingdom, which has a much stronger currency than the real.
There are particularities in the segment. As in the United States each state establishes its own rules on the subject, the North American market is not considered as a whole, but through each federation.
Missing information
The first obstacle to establishing rules for the sector in Brazil is due to the absolute scarcity of reliable information about the national market. It is known that a few hundred betting platforms currently operate in the country from offices abroad. How many? Impossible to know.
I started a survey on the subject at the end of last year and have already computed 190 betting platforms that operate here. In my research, I only considered sites that have Brazilian Portuguese versions and offer sports betting. I did not consider online casinos, bingos and raffles, among other forms of gambling.
Depending on the survey, the estimate is much higher: from 400 to 500 companies operating freely in the country without any regulation. I’ve seen statistics that speak of 3 thousand and even 4 thousand players, which I consider exaggerated.
Without knowing how many people work, it is even more difficult to know how much the sector collects in Brazil. Estimates are again mixed. There are those who say that betting sites have revenues of R$ 12 billion per year in the country. And there are sources that speak of R$ 150 billion.
There is no lack of sponsorship
According to a survey by the BNL Data website, betting platforms currently invest BRL 327 million just in sponsoring 19 of the 20 clubs in Série A of the Brasileirão. That number is nowhere near the whole.
There are those who invest in clubs from other divisions. There are those who spend with other modalities. Others prefer to hire ambassadors among athletes, digital influencers and characters from the world of music and entertainment.
There are also players who invest in TV advertising, YouTube channels or sports podcasts (today, almost all the most relevant programs have a betting company as their main sponsor). Others prefer to spend money on programmatic advertising on Google or social media. And there are those who spend nothing and simply attract customers using names similar to those of famous websites.
We need more talk on the subject?
There are still those who believe that, more than four years after the law was enacted, the issue has not been sufficiently debated. The Brazilian Football Confederation (CBF), for example.
In this final stage of regulation, the confederation claimed to be heard. In a preliminary proposal, he asked that football earn a share of 4% on gross revenue from games. It is a reasonable increase compared to the 1.63% allocated to sports entities, which has been provided for by law since 2018. A number that had not yet been contested.
Botafogo, Corinthians, Flamengo, Fluminense, Palmeiras, Santos, São Paulo and Vasco also want to be heard on the subject. Since 2018, they had never commented on the subject. Neither individually nor jointly. During this period, they only benefited from the sponsorship of betting sites. Currently, all of them have a partner in the segment, and five of them are master sponsored by a company in the sector.
Strangely, with weeks to go before the government edits the long-awaited provisional measure (MP) to regulate betting, they decided to participate in the discussion. Apparently, they also want to earn more.
Lack of regulation
It is to think what is best for the sector. With the regulation, the State will start to collect taxes and license fees. It will also have to create a specific authority to regulate gambling in Brazil, combating match-fixing and campaigning in favor of responsible gambling, among other relevant issues.
The economy will benefit from the generation of jobs, with the need for these players to establish operations in Brazil. And investment in sponsorship and sports marketing in the sector tends to increase in an even more heated market.
Even if practice shows that there are holes in the regulations, they could be corrected little by little, until best practices are sought, looking at the specificities of the national reality.
On the other hand, endless discussions can cause the topic not to move forward. The market would again see the opportunity to establish its rules. Everyone would lose, including those who today claim to earn more in the transfers of the law.
Lets see what the scenes of the next chapters will be.
