Brazil regulates sports betting with 18% tax
The signing of Provisional Measure No 1,182 means that the 2018 Brazil sports betting regulations approved in Law No 13,756 have now been passed, with several amendments.
These include a slightly higher gross gambling revenue tax, more detailed marketing restrictions and an increased licence fee.
The watershed moment is the largest step forward in the journey to regulate sports betting since the 2018 law first passed the Brazilian Senate.
Law of the land
The Brazilian legislature, the National Congress, now has 120 days to approve the PM, which was unilaterally issued by the government.
The Congress may block the measure however, as of today, the regulation is the law of the land.
The Ministry of Finance will now begin establishing the National Secretariat for Games and Betting (SNJA). This will be charged with regulating the sector.
Reportedly, the Ministry has been hiring for the new regulator since last month. It is expected to hire 70 total employees.
Once fully established, the SNJA is charged with establishing licence procedures and other pieces of technical regulation.
Amendments to 2018 law
The PM includes several changes from the 2018 law.
The creation of the SNJA was not included in the original regulations.
The tax on revenue has increased from 16% to 18%. This was done in order to increase the amount of revenue flowing to the Ministry of Sports from 1% to 3%.
While the cost of a licence was not included in the PM, according to reports it is expected to increase to R$30m ($6.35m/€5.74m/£4.94m) from the previously established R$22.2m.
The PM includes a clause stating that foreign operators will be permitted to apply for a licence. This was more ambiguous in the original regulations.
More detailed advertising restrictions
The law also establishes far more detailed marketing and advertising restrictions compared to the 2018 law.
Operators will be required to promote responsible gambling messaging and are barred from acquiring the broadcast rights for sports.
The law establishes a self-regulatory framework in this area. Gambling businesses are expected to comply with the National Council for Advertising Self-Regulation (CONAR) standards.
Long journey
It has been close to half a decade since lawmakers in Brazil voted to approve both land-based and online sports betting in 2018.
When the law was passed, the government had two years to create and sign off the technical regulations. There was also the option of a further two-year extension.
After actioning the extension, the country’s Secretariat of Evaluation, Planning, Energy and Lottery (SECAP) published its rules and regulations for sports betting in May 2022.
This meant that Brazil’s then president, Jair Bolsonaro, had a final deadline of 12 December 2022 to approve the final regulations.
The president chose not to do so before the deadline.
However, after the 2022 election, President Lula emerged as the winner. Lula is considered more friendly to the gambling sector than Bolsonaro.
Additionally, match-fixing scandals in the country led to public pressure to regulate the activity.
It was first reported that the government would be approving a PM to regulate sports betting in February.