Brazil’s IBJR shares “deep concerns” over sports betting regulation delays and tax rates

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The Brazilian Institute of Responsible Gaming (IBJR) has lambasted the “uncertain trajectory” of the regulation of sports betting in the country, after further delays to the framework were confirmed.

Explaining its deep concern over the state of regulation in the nation, IBJR outlined that further delays and “sudden change of courses” are creating insecurity after over four years of waiting for regulations to be set in stone. 

An IBJR statement read: “The recent news that the announced Provisional Measure promised for the end of April would be converted into an urgent Bill of Law marked yet another sudden change of course in relation to the plan that the Government Federal had communicated to the market, generating new delays, and insecurity among operators and members of the IBJR.

“Over the more than four years in which we have been waiting for the regulation of the sector and the issuance of operating licenses, since the approval of Law Nº 13,756 by the National Congress and its sanction by the President, our optimism with the potential of the Brazilian market has been tested.”

The IBJR had specific concerns about the strict tax rates in Brazil, which SBC Noticias reported would be at an effective rate of 28%. Moreover, the collective – which was formed in anticipation of sports betting regulation’s imminent launch – complained that the proposed license fee of R$30m would be one of the highest access fees in the world. 

These two issues, IBJR claimed, could send players in the direction of the illegal market, given that offshore operators have a wider array of products such as online casino, as well as no taxes. 

In response, the collective has issued several requests as the regulatory framework process heads toward its conclusion. These demands include the maintenance of the tax rates proposed in the sports betting legislation of 2018, an adjustment of individual income tax to reflect sports betting’s low margins compared to lotteries, as well as giving freedom to operators to decide on individual markets.

Rounding off its letter to legislators and regulators, IBJR stated: “We insist that regulation is the right answer to face the social and economic challenges of this industry. However, regulation must be coherent and must be in line with sustainable, successful international markets that have been operating for decades.

“As the regulatory process enters its final stages, we are still not convinced that decision-makers understand that legitimate institutional investors will not seek licenses in Brazil without the guarantee of sustainable and fair regulation, which enables fair competition between operators.

“Brazil is not an attractive market at any cost.”