Betting regulation is in focus in the Federal Senate. The vote on Bill 3626/2023, which seeks to regulate the sector, was initially scheduled for 6/12, but ended up being postponed until this Tuesday.
Some senators who oppose its approval argue that online casino games were not originally covered by Law 13,756/2018 and should be discussed on another occasion.
This concern is valid, but it is crucial to understand the implications of excluding iGaming from regulation.
Impact of non-regulation of betting
According to the IBJR, the decision not to regulate the iGaming sector would have the following consequences:
- It would drive away serious national and international companies that are willing to contribute to the country’s economy;
- It would create a favorable environment for groups that do not comply with the rules to proliferate;
- It would abandon billion-dollar revenue, significantly affecting support for sport in the country.
Foreign companies offering sports betting often include iGaming in their offering, as 70% of customers who bet on sports also engage in iGaming, representing a significant portion of their revenue, sometimes exceeding 50%.
Therefore, removing iGaming from the project would result in the pipeline falling apart. The IBJR estimates that at least 50% of players would continue to operate underground, without generating taxes and subject to fraud, gambling and other risks.
Impacts
Currently, the estimated revenue of the sector served by foreign companies is approximately R$15 billion/year.
Without iGaming, sports betting would only generate R$6 billion, a reduction of 60%. Considering the 50% loss in plumbing, the domestic market would be approximately R$3 billion/year.
In summary, the Federal Government’s estimated tax base would fall from R$15 billion to R$3 billion.
“If we apply the rate of 12% of operators’ revenue, the expected revenue for 2024 would be just R$360 million, far below public expectations and the needs of a sustainable formal market”, says the note.
Therefore, IBJR defends the inclusion of iGaming in PL 3626/23 as the most effective and legitimate way to formalize and organize this new sector in the Brazilian economy, protecting society from harmful practices and promoting a safer and more responsible betting market.
