Brazil names regulated sports betting official as key signatory
Brazil’s regulated sports betting market is closer than ever to the finish line, with just one hurdle remaining. On Monday, President Inacio Lula da Silva signed legislation that would revitalize the market in the country.
Da Silva signed Provisional Measure 1182 seven months after taking office, ending the indecision of his predecessor, former President Jair Bolsonaro. This enables the government to publish framework regulations in the Official Gazette and give them legitimacy.
Just one more step to solidify Brazil’s position in the global regulated sports betting market. The National Convention must review the rules within the next four months and decide whether they are functioning properly.
Treasury provides catalyst
Brazil has been trying to introduce regulated sports betting for years. The first hurdle to overcome was a law that gave the government exclusivity over almost all gambling activities.
This was achieved when Treasury moved forward with interim measures and removed the "exclusionary" language from previous legislation. At the same time, the agency outlined what it believes should be the day-to-day operations of taxation and markets.
Operators will have to pay an 18% tax rate on their gross gaming revenue (GGR), which is 2% higher than the previously proposed rate. That doesn’t include licensing fees, which could be around 30 million reais ($6.3 million).
Taxes and licenses are only part of what ultimately makes up an operator's costs. Operators must pay a certain percentage of the GGR calculated after payment of any bonuses and income taxes to social security, education, sports programs and the state public safety fund.
Additionally, not all operators are eligible for a license. First, they must manage their Brazilian operations from an office located in Brazil. They must also prove that they are financially sound and not subject to any legal investigation.
The Ministry of Finance will be responsible for issuing licenses and regulating the market. Currently, under temporary measures, there is no limit on the number of licenses available.
Learn from other markets
Things have changed a bit since Brazil first proposed a 5% tax rate, and punters will need to keep a close eye on what they're doing. The federal government may change the temporary measure, requiring punters to withdraw their winnings within 90 days or risk losing them.
No one at the operator's partner or shareholder level can play any role in a sports organization. In addition, no operator can enter into a contract for the broadcast rights of sporting events.
Anyone working in the sports industry, such as coaches, referees and players, is prohibited from placing bets on events to prevent match-fixing. The ban also applies to anyone operating a "fixed-odds lottery system", anyone under the age of 18 and public bodies responsible for overseeing betting markets.
Many sports betting operators have begun to establish themselves in Brazil. If they fail to obtain a license and attempt to provide services, they face hefty fines.
The interim measure provides for fines ranging from 0.1% to 20% of an operator's revenue per violation, up to a maximum of 2 billion reais ($421 million). Severe fines may also result in the revocation of an operator's license.
If all goes according to plan, Brazil is expected to reap significant profits from regulated sports betting. Government revenue is expected to be 2 billion reais next year and 12 billion reais ($2 billion) in subsequent years.
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Source: www.casino.org
