Brazil postpones betting vote as Senate is divided on the status of online casino

The final vote needed to approve the launch of Brazil’s federal sports betting marketplace has been postponed.

The plenary of the Federal Senate was scheduled to vote on Bill 3,626/23 today (Wednesday, 29 November). However, last-minute deliberations see senators divided on the inclusion of online games (casino) incorporated in the bill’s text.

Bargaining reportedly went down to the wire, but opposition to online casinos maintains that the Bill’s modalities provide no adequate framework to regulate online casino games.

Senators opposed to online casino modalities asked Senator Veneziano Vital do Rêgo, Vice President of the Senate, to postpone the vote.

The opposition insists that further inspection are necessary, as Bill 3,626/23 has undergone more than 100 changes since its submission from Congress to the Senate in September for federal review.

Senator Vital do Rêgo, overseeing the plenary session, did not set a further date to vote on the Bill’s passage, leaving the matter to be resolved by Senate President Rodrigo Pacheco, who could not oversee the vote as he was attending the United Nations COP-28 Climate Summit in Dubai.

The PT government is expected to urge Pacheco to set a definitive voting date on Bill 3,626/23, recognised as a priority for President Lula da Silva and Finance Minister Fernando Haddad’s federal budget for 2024.

As previously stated by Minister Haddad, the government aims to raise approximately BRL 12bn per year (€2.1bn in taxes) – crucial to funding President Lula’s economic recovery program.

The delay has further frustrated Brazilian gambling stakeholders, as the Economic Affairs Commission (CAE) completed its review of the fiscal and tax modalities of Bill 3,626/23 last week.

CAE rapporteur Senator Angelo Coronel, conducting the Bill’s final review, supported online casino modalities as necessary for maximising tax revenue from gambling.

The PT government’s ‘provisional measure’ for a sports betting market, submitted to Congress in July, initially did not include any proposals to regulate online casino games.

During its 120-day passage through Congress, online casino modalities were introduced by the then rapporteur, Adolfo Viana of the Social Democratic Party.

These modalities were added to Bill 3,626/23 as amendments broadly sanctioned as ‘Online Game Events’ without specifying which types of games would be permitted.

The Chamber of Deputies carried Viana’s amendments in September, forwarding Bill 3,626/23 to the Senate for scrutiny by relevant commissions for federal approval.

Senator Romario of the Liberal Party and President of the Senate Sports Committee immediately expressed concerns about online casinos and submitted counter-amendments for their removal from the Bill, which he argued should be dedicated exclusively to fixed-odds betting.

Despite opposition, the CAE did not consider the amendment proposed by Senator Romario in its final review.

The CAE’s final endorsement included reducing the tax framework from 18% to 12% on licensed operators’ income and from 30% to 15% on player prizes, arguing that lower taxes are needed to attract consumers and businesses to the new federal market.

With today’s vote postponed, Bill 3,626/23 may still be amended by rapporteurs. If it undergoes significant changes to its legislative modalities, the Bill will return to the Chamber of Deputies for further analysis.