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Sports betting: 134 companies have already requested prior authorization to operate in Brazil

Aposta Esportiva: 134 empresas já pediram autorização prévia

Manssur, assessor especial da Fazenda, que está à frente da regulamentação das apostas esportivas. Foto: Fernando Donasci

BRASILIA – The Ministry of Finance, together with other departments, is preparing 12 ordinances to enable the regulation of sports betting and online casinosapproved by the Chamber of Deputies last Friday and still pending presidential sanction. The bill is part of the revenue increase package adopted by minister Fernando Haddad, who committed to the goal of zero deficit in 2024.

To Estadão, the special advisor to the Executive Secretariat of Finance, José Francisco Manssur, estimated a revenue potential of R$12 billion annually in a fully regulated market, which, according to him, should be achieved within five years. For 2024, the extra revenue has not yet been accurately recalculated by the Federal Revenue, but Manssur predicts that it could exceed R$3 billion, already including the grant payments by companies.

It is more than quadruple the amount foreseen in next year’s Budget, which amounts to R$728 million. This is because, during the text’s processing, deputies included online casinos in the proposal. Furthermore, there is a higher than expected demand for grants, according to Manssur, with 134 companies having already requested prior authorization to operate in the country. Each of them will have to pay R$30 million to operate for five years.

“What we see in the market is that online gambling (casino) represents 65% to 70% of companies’ revenue. So, we expect a proportional increase (in the revenue projection). Furthermore, our budget estimate was quite conservative”, he states.

According to Manssur, the expectation of the economic team is that the text will be sanctioned in 2023, so that taxation can begin in January. “It is the Civil House and the president who determine, but they are all aware of our need,” he said.

The project approved by Congress taxes companies 12% on gross gaming revenue, minus the prizes paid to bettors – the so-called GGR (gross gaming revenue). Bettors will have to collect 15% on winnings exceeding R$2,112, but this payment will be made on an annualized basis, and not prize by prize – as predicted in the original text.

over revenue

This billion-dollar market that is open to the Brazilian tax authorities – the third largest in the world, behind the USA and the United Kingdom, according to “bet” numbers passed on to the government – will be monitored and inspected by a new Betting and Lottery secretariat, which will be within the scope of the Treasury.

The structure, which should have 38 positions, became the target of disputes amid the Lula government’s negotiations with Centrão, which took over the Ministry of Sports. Currently, the department is commanded by deputy André Fufuca (PP-MA), a trusted name of the president of the Chamber, Arthur Lira (PP-AL).

According to Manssur, even with the secretariat under the Finance umbrella, the expectation is that there will be joint action between the two departments. “In the case of combating result manipulation, for example, the leading role will be the Ministry of Sports, and the Treasury will be available with systems that can help identify cases”, says the advisor, also mentioning the transfers to entities of the sector.

“There is a large transfer to the sports system. Of this amount, part remains in the Ministry of Sports itself and the other goes to sports entities of the most diverse nature”, he states.

Of the total GGR (gross revenue minus premiums), 88% will be allocated to company costs and profits and 12% will go to public coffers. Of this portion that will go to the National Treasury, the majority, more than a third, will be allocated to the department headed by Fufuca. Tourism, headed by deputy Celso Sabino (União-PA), also linked to Lira, will have the second highest percentage.

The division of public funds, after a series of changes in the Chamber and Senate, looked like this:

Addiction and Advertising

Among the 12 ordinances that will be published by the Treasury over the next few weeks is a text in partnership with the Ministry of Health that establishes measures to combat gambling addiction.

“We want to put into practice a care service for addicts. Both he and his family will be able to contact the public health service”, says Manssur, stating that the ordinance is practically ready, just waiting for the text to be sanctioned so that it can be edited.

There is also an ordinance in partnership with Conar (National Advertising Self-Regulation Council). “The message (that companies send through advertising) can never be: ‘Use gambling as a way to get rich’. We will face this with great force, including in the speeches of influencers”, says the advisor.

The objective is to encourage what the Treasury calls “responsible gaming”. “Advertising, in addition to not being able to say these things, will still need to carry messages such as: ‘Play responsibly and in moderation’”, he states.

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