Brazil amends legislation on sports wagering.
The Brazilian Ministry of Economy's Secretariat for Evaluation, Planning, Energy and Lotteries (SECAP) has called for a third meeting on the sports betting law. The anticipated start of the market in March now faces significant adjustments. What updates should we anticipate?
More Control for the State
SECAP has directed a revision of the amendment to the sports betting regulation law. This development comes as a surprise, and, according to news reports, the changes are prompted by sources within the Ministry of Finance. Previously, SECAP conducted a conclusive consultation on the sports betting law in September 2019. The new market was intended to launch by March, but substantial delays in the licensing procedure are now predicted.
The desired alteration is attributed to the Attorney General's Office of the National Treasury (PGFN), which guides legal matters in the Ministry of Finance. They contend that a fresh concession model would provide the Brazilian government more authority over the sports betting sector, to combat infractions by licensees and exclude unlawful operators.
Stricter Regulations Imminent
A substantial reduction in licensed operators is projected. The initial blueprint called for a total of 150 sports betting licenses. However, the PGFN questions if this will materialize. Instead, tighter licensing conditions seem to be prioritized. The current goal is to establish stringent measures to impede the illegal sector.
Clarity on license fees is still lacking, and adjustments to the entire model are needed. This might hinder the ambitions of small businesses aspiring to penetrate the market. Meanwhile, big-money brands now have an advantage in obtaining highly sought-after licenses.
All unauthorized providers, even those operating abroad, risk "serious consequences". Jure Sente, an associate at the Brazilian legal company, Montgomery & Associados, confirmed:
"SECAP has openly stated that once a licensing procedure is instigated and licenses are granted to businesses fulfilling all legal prerequisites, unlicensed operators, even if located overseas, will face severe consequences from the regulator."
Launch Delayed by Months
With the third consultation underway, the market's opening is now anticipated for the latter half of the year. The consultation period continues until March 6, implying that the legislation will come into force at least six months later. Jure Sente considered this development "remarkable", yet unsure about the decision's efficacy.
Possibility of Tax Hikes
The restricted license model could also lead to increased taxes for gambling companies. The initial proposal called for a low tax rate of 1%, but the September consultation mandated a 3% revenue tax for online bookmakers and a 6% revenue tax for land-based operators.
Financial experts foresee a surge in the combined revenue of South America's online gambling sector, from over $4.9 billion USD (approximately €4.4 billion) to a much higher value. Accordingly, a higher tax levy is anticipated.
Betsson Poised for Dominance?
Swedish gaming provider Betsson might be the standout victor in the unforeseen restructure. In December, it was revealed that Betsson had acquired a 75% stake in the Brazilian sports betting firm Suaposta. Suaposta proclaims to be the only brand lawfully permitted to offer sports betting in Brazil.
Betsson accentuated its December statement, disclosing that the deal would secure "the optimal position for the upcoming and anticipated regulation of the Brazilian sports betting market". The prediction now appears to be materializing. Indeed, Suaposta partners with the Rio Grande do Sul Jockey Club and is sanctioned as a betting operator by the Brazilian Ministry.
However, Betsson perceives additional benefits in its Brazilian partnership as well. Suaposta is considerably connected in the marketing and real estate realms. The partnership yields "invaluable resources" for Betsson, including access to local payment methods and highly active social media channels. It remains to be seen if Betsson will truly become an influential force in Brazil as a European corporation.
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Source: www.onlinecasinosdeutschland.com
