Brazil publishes provisional sports betting measure

Brazil publishes provisional sports betting measure

Four years after the law was first signed off, the new Brazilian government of President Luiz Inácio Lula da Silvahas published a provisional measure to amend and implement sports betting law.

This provisional measure took effect immediately upon its publication on Tuesday July 25th, with Congress will having a further 120 days to approve, amend or reject it.

The measure proposes that the headline rate of tax on online betting gross revenue be significantly increased to 18%, not accounting for any local municipal taxes and a further 9% in corporation and social security taxes.

With an upfront operator licence fee of R$30m (US$6m) to also consider, coupled with the fact that these changes do not address other forms of online gaming, there are fears in the market that the expansion of illegal iGaming activities might actually be encouraged by this development.

Further provisions within the proposed legislation include a range of penalties for illegal operation and marketing, a requirement for ISPs to block unlicensed sites and for the Bank of Brazil to introduce regulations to block illegal transactions. The draft Bill (Bill 3626/2023) proposed alongside the provisional measure grant a range of powers to the Ministry of Finance.

In an official statement, the Ministry of Finance said it had “co-authored both the provisional measure and accompanying Bill with the Ministry of Sport and that the two pieces of legislation combined would ensure the confidence and security of bettors through transparent rules and regulation.”

Brazil hopes to generate an initial R$2bn (around US$420m) in annual revenue for the government from fully regulated sports betting. However, as it stands, these proposed legislative changes seem to throw up more questions than answers and it is easy to suspect that it will be some time yet before this atmosphere of confusion can be lifted.

Author: Charles Howard