Gambling regulation government evaluates mechanisms to curb excessive gambling
Photo: José Cruz / Agência Brasil

The Federal Government is considering inserting forms into the regulation of sports betting to curb excessive gambling, according to an article by Metrópoles. The tendency is for the Ministry of Health to act in this regard, providing a telephone line for Brazilian players, as already happens in other countries.

Another possibility is the creation of some form of assistance with mental health professionals from the Unified Health System (SUS). These mechanisms should appear only at a later stage of the regulatory process.

The Ministry of Finance has already finalized the draft of the sports betting regulation text, however, it is awaiting a definition on the subject. The folder’s preference is via a provisional measure, which has immediate action. The Metropoles portal published a very detailed article on June 8th. Check below:

Sports betting regulation: government studies helpline for addicts

The federal government is considering including mechanisms to curb and treat gambling addiction in the regulation of sports betting, according to sources consulted by Metrópoles. The idea is for the Ministry of Health to act in this regard, offering a telephone line for gamblers, as some countries do, or some type of service with mental health professionals from the Unified Health System (SUS).

This mechanism should only come at a later stage of the regulation, by ordinance (infralegal norm that does not require processing in the National Congress).

The rules for communication, publicity and marketing, such as, for example, advertisement airing time and online advertisement format, will be elaborated in partnership with the National Advertising Self-Regulation Council (Conar).

Form of regulation

The Ministry of Finance has already concluded the draft of the betting regulation text, but is waiting for a definition on the form.

The possibility of sending a bill with constitutional urgency was raised, due to the clash between the mayor, Arthur Lira (PP-AL), and the president of the Senate, Rodrigo Pacheco (PSD-MG), over the rite processing of MPs in Congress.

However, urgent PLs are not valid immediately and only lock the voting agenda after 45 days of processing. Minister Fernando Haddad’s team prefers to address the issue via MP, which generates immediate effects and allows, as soon as it is edited, the government to work on acts to define taxation and other aspects involved, such as gambling itself.

The rush to regulate the market is in order for the government to start inspecting and collecting as soon as possible. The most recent estimate is that the collection will revolve around R$ 12 billion to R$ 16 billion. Perhaps this number will not be reached in the first year, only when the regulated market is solid.

Companies will have a period of 180 days (six months) to register in Brazil. It will be necessary to present a business plan and be headquartered in the country. Only qualified companies will be able to receive bets related to official sporting events, organized by federations, leagues and confederations. Companies that are not qualified will incur illegal practices and will be prohibited from carrying out any type of advertising, including in digital media.

Qualified companies will be charged a grant fee of R$ 30 million for five years. This fee should help pay for the acquisition of technology and intelligence systems for inspection and punishment, that is, to find cases of manipulation.

Technicians have already received systems companies that monitor ways to curb the manipulation of results. Operators, clubs, the Brazilian Football Confederation (CBF) and other actors involved were also heard.

The longer it takes to give the deadline, the longer it will take to start collecting. With this, work is already being done with the possibility that the collection will only start from 2024.

Today, with the sector deregulated, 280 domains have been identified in the country. It is expected that, after regulation, between 70 and 100 companies will operate in this market.

Integrity agency and secretariat

The government also foresees the creation of an integrity agency to monitor betting and lotteries, which should be done by bill (PL). The Ministry of Sport is in charge of preparing this project. This is the first regulatory agency proposed by the current government.

It is still foreseen the creation of a secretary, in the structure of the Treasury, with 80 positions. The request for the creation of positions has already been submitted to the Ministry of Management and Innovation in Public Services. By orientation of the President of the Republic, the federal government should not open new vacancies in 2023, so as not to swell the public machine, but there is an expectation that there will be an exception in this case due to the potential collection.

There is a calculation that the creation of these 80 positions will spend 10% of what the government will earn from grants, that is, R$ 3 million.

Delay and pressure

In December 2018, Law 13,756 introduced the possibility of fixed odds bets into the legal system. The Jair Bolsonaro (PL) government had a period of two years, extendable for another two, to regulate the market, but it did not.

As a result, the rules for the operation of this market were not stipulated and it continues to be tax-free. In March, the Public Prosecutor’s Office, together with the Federal Audit Court (TCU), questioned the Lula government (PT) about the regulatory deadline for the issue.

“This lack of regulation can cause billionaire damage to the public coffers”, declared the attorney Lucas Furtado in the representation.

Due to this context, sources at the Treasury consider it “an absurd hypothesis” to wait for the CPI on Sports Betting to unfold in Congress, which initially runs until September, and may be extended. “Regulation after the CPI is completely out of the question for us,” said one of the sources.

The discussion on the subject has intensified in recent weeks, after the Public Ministry of Goiás (MPGO) denounced 16 people for fraud in the results of 13 football matches.

According to investigations, players received funds of up to R$ 100,000 to purposely provoke yellow and red cards and benefit gamblers. The cases occurred in games from series A and B of the Brazilian Championship, in 2022, and in the Paulista and Gaúcho championships, in 2023.

Eight players were removed from their clubs on suspicion of participating in the scheme. The list includes names from Fluminense, Santos, Athletico Paranaense, São Bernardo, América – MG, Coritiba and Colorado Rapids (USA).

How will it work

In the regulation, the government provides for a 16% tax on companies on Gross Gaming Revenue (GGR, gross revenue from games, minus premiums paid to players). Bookmakers will keep the remaining 84% (operator profit and costs).

On the prize received by the bettor, 30% of Income Tax will be taxed, respecting the exemption of BRL 2,112.00.

Of the 16% charged on revenue obtained by companies in the sector, there will be the following allocation:

10% will be allocated to social security;

2.55% will be allocated to the National Fund for Public Security (FNSP), for actions to combat match-fixing, money laundering and other acts of a criminal nature that may be practiced in the context of betting or related to it;

1.63% will go to sports clubs;

1% will go to the Ministry of Sports; It is

0.82% will go to basic education.