In a statement on the official website of the Brazilian Chamber of Deputies, the Government confirmed that it will modify the provisional measure that regulates the local sports betting market. Some of these modifications were discussed in the Finance and Taxation Committee of the Chamber.
The South American country is ramping up efforts to approve a set of rules for the sports betting industry, mainly due to the Government carrying out studies that show that Brazil loses around $1.2bn in taxes every year.
The statement also confirms the details recently shared that set a 15% tax on GGR and that each operator will need to pay approximately $5.9m (30m reais) for a five-year, renewable gaming license.
José Francisco Manssur, a representative from the Ministry of Economy, said at the public hearing that this measure will require a minimum capital from the operators, although he didn’t specify the amount. Manssur also said the operators will be in charge of paying some subsidies.
In order to be eligible to operate, the companies need a local address in Brazil, along with a local team and a real structure in place.
The representative reinforced the idea that Brazil loses billions annually for not regulating the sports betting industry: he shared an estimate and said that the Public Ministry and the Federal Court of Accounts believe that $1.2bn are lost every year. “That number could be even higher today, because the market keeps growing,” he said.
The Brazilian Institute for Responsible Gaming (IBJR) and the National Association of Games and Lotteries (ANJL), who are part of the process, have shared that foreign companies are satisfied with the proposed conditions.
Despite the fact that the sector has been legalized since 2018 through Law 13,756/18, Deputy Jorge Gotten said that “the important thing is to legalize the sector, no matter how.”
“Including the criminalization of illegal gambling in this discussion is just as important as legalizing gambling. Otherwise it will be a waste of time, serious businessmen will give up,” he added.
While the government evaluates the requirements to shape the market, the Brazilian Football Confederation (CBF) and several clubs have requested a higher percentage of profits from betting: they want to increase the percentage from 1,63% to 4% of net revenues.
As a result, the IBJR responded that the CBF and soccer clubs “are welcome to negotiate image rights with operators, as is already done in duly regulated markets,” although they highlighted some reluctance towards requests from sports organizations.
The IBJR said that it’s against changing the law and argued that sportsbooks don’t actually reproduce images of sports entities and that specific financial contributions to the CBF or soccer teams “generate inequality and legal uncertainty.”
As the Institute explained, in order to increase the percentage allocated to sports, the funds sent to the State must be reduced – which, in turn, would invest it in the Safety and Health areas. The other option is to reduce the profit for the companies, which would make the market less attractive since they could generate losses.