Brazil sees further positive developments on its journey to launch a federal sports betting market, as President Lula da Silva formally signs off on the ‘provisional measure No-1182’.
Lula’s signature sees the PT (Workers Party) government throw its full weight into legislating a sports betting market in Brazil, to be launched within the coming months.
Starting this week, Congress will be granted 120 days to analyse the projects and pending reforms put forward by the provisional measure, backed by Lula.
Referred to as MPs, provisional measures (Portuguese: Medida Provisória) are legislative demands authorised by the President of Brazil to fast-track important and urgent actions, which require a review by Congress.
Since the beginning of the year, Finance Minister Fernando Haddad has been tasked with drafting modalities to make up the provisional measure for Brazil to launch its federal sports betting regime.
As previously announced by Lula and Haddad, the government will aim to govern the sports betting market via a ‘Special Secretariat’ assigned to supervise licensed operators, market size and authorised bets.
Final changes have been applied to the provisional measure’s tax framework which registers an increase in gross gaming revenue (GGR) tax from 16% to 18% applied on licensed operators. The tax increase reflects a settlement with Brazil’s Sports Ministry, which had demanded that 3% of betting GGRs be directed to its office.
Further charges will see consumers face a 30% income tax on winning exceeding BRL 2,112 (€410) per year.
Operators (foreign or domestic) seeking to join the market will be charged approximately $5.9m (FX dependent) for a licence application, lasting a period of five years. On licensing, the government will allow ‘unlimited concessions’ for both land-based and online sports betting operations.
Following deductions, tax revenues from sports betting will be distributed among social security (10%), entities of the National Sports System and athletes (1.63%), operators’ expenses (82%), and the Ministry of Sports (3%).
The update saw Haddad revise his initial tax income estimate in which the Treasury expects a regulated sports betting market to generate around $400m (BRL 2bn) in taxes per year.
Further developments saw a bill adopting ‘administrative processes and penalties’ signed by Lula to be added to the provisional measure.
As such, licensed operators will be mandated to promote ‘responsible gambling’ to Brazilian consumers and must further ensure the data protections of customers, and to work with police authorities against match-fixing.
The new decree outlines penalties of up to “10,000 reais (€2000) per day, up to 20 times” can be imposed for the infringement of rules on conduct and compliance.
The market’s rules related to advertising and marketing will be separately drafted by The National Council for Advertising Self-Regulation (CONAR).
The Ministry of Sport has accepted the changes to the provisional measures and has vowed to work with the Ministry of Finance to ensure integrity in sport. H2 will see a special parliamentary committee present its findings and recommendations on how Brazil should implement its new sports integrity protections.
Entering its final procedure, the passage of provisional measure No-1182 may face a final intervention from Arthur Lira, the President of Brazil’s Chamber of Deputies.
Lira, the leader of the Lower House, has previously warned Lula and Haddad that any gambling-related legislation must be treated as a constitutional matter, in which the government must settle terms on a Federal Bill to launch Brazil sports betting regime.