Brazil enacts provisional sports betting regulations

The Government of Brazil has enacted a Provisional Measure to regulate land-based and online sports betting.

As first reported by Gaming Intelligence Español, the Provisional Measure (PM) was enacted Tuesday (25 July) following its publication in the Official State Gazette, with lawmakers now having a maximum of 120 days in which to approve or amend the government proposal.

The PM imposes an 18 per cent tax rate on gross gaming revenue, up from the 16 per cent proposed in the original version unveiled in May, and provides for an unlimited number of licenses to domestic and foreign operators.

The government expects to generate R$2.0 billion (€380m) from regulated sports betting in 2024, rising to an estimated R$12.0 billion over the coming years.

The Provisional Measure prohibits unlicensed operators from advertising or serving the market and imposes fines of between 0.1 per cent and 20 per cent of revenue, up to a maximum R$2.0 billion per infraction.

It also prevents licensed operators from acquiring or financing the acquisition of broadcast and streaming rights to sporting events.

The Brazilian Institute for Responsible Gambling (IBJR), an industry association of leading betting operators, welcomed the new regulations but claimed that the high tax rate will drive consumers to illegal operators.

"This burden concerns companies in the segment and should be viewed with skepticism by Brazilian society, as the entire economic chain derived from this sports betting sector will be impacted," said IBJR chief executive André Gelfi. "Another consequence will be the growth of the parallel market, both physical and online, since companies that operate legally will pass on costs to gamblers and they, in turn, tend to look for more attractive alternatives."

The National Association of Games and Lotteries (ANJL) described the Provisional Measure as a first step in bringing security to Brazilian gamblers.

ANJL president Wesley Cardia commented: "Today, there are companies in the country that seek the best international practices, in line with regulations and fair taxation, and those opportunists, who, behind the scenes, hope that nothing changes, to continue operating outside the rules.

"With this regulation, an effective inspection of the sector is expected, curbing the activities of illegal sites that refuse to adopt good practices aimed at fair and responsible gambling. The PM, however, is just the beginning. The National Congress has yet to discuss and vote on a Bill that will bring even more details for the improvement of the sports betting sector in Brazil."