In what could mark a significant shift in the Brazilian gambling landscape, the Senate plenary’s decision-making process saw an unexpected turn of events this past November. Instead of proceeding with the final vote as initially scheduled for today, 29 November, there has been an agreement to push the decision on the comprehensive gambling regulation bill to a later date in December, which remains to be confirmed.
The bill, fervently advocated by Senator Angelo Coronel, aims to introduce a legal framework that would usher in regulated sports betting and online casino ventures in Brazil. Senator Coronel and fellow lawmakers aim to thoroughly deliberate over the more than 100 amendments proposed recently. These amendments encompass various facets of the gambling industry, including the application of a 12% taxation rate on fantasy sports—a rate consistent with what has been proposed for sports betting and online casinos. The involvement of the health sector in the exclusion process for gambling activities is also on the table for discussion.
One significant reason behind the postponement was the absence of a quorum for the plenary vote, necessitating the delay of the final ruling. Another impetus for this deferral is the sweeping number of requested changes that warrant further inspection and debate among the senators.
The responsibility to select the new date for the vote now rests on the shoulders of the President of the Brazilian Senate, Rodrigo Pacheco. While the precise day in December for this crucial vote remains undetermined, expectations are set for the decision to transpire before year’s end.
As it stands, the passage of the bill requires a circuitous journey: after gaining Senate approval, it must be remanded to the Chamber of Deputies for another round of reviews. Should the bill’s amendments receive the green light, the final lap will involve forwarding the legislation to President Luiz Inácio Lula da Silva’s desk for his signature.
The progression of this betting bill caught the public eye following its affirmation by the Economic Affairs Committee (CAE) on 21 November. Amid surprising turns, such as the late-stage inclusion of online casino regulations in September, the bill also introduced tax rates that are considerably more lenient than those in the original proposal. The rate of gross gaming revenue (GGR) taxation has been dropped from an initial 18%, as prescribed in Provisional Measure (PM) 1,182, to a more favorable 12%, and the tax rate on bettors’ winnings is proposed to be halved from 30% to 15%.
Furthermore, the bill calls for a substantial licence fee of R$30m (translated to approximately £4.8m or €5.6m), with licence durations spanning five years. Revenue from the projected tax on gambling will be channeled into various public sectors: sports (36%), tourism (28%), public safety (14%), and education and social security tied at 10% each.
A notable revision is also in the works regarding inspection fees, which will pivot from being determined by the amount of premium paid to a formulation based more significantly on GGR levels.
Prospective operators will have to navigate stringent regulations, including obtaining validation from the Ministry of Finance. Criteria for eligibility include taking on a Brazilian partner who owns at least 20% of the company’s capital within the country and implementing robust cybersecurity measures.
The bill outlines strict identification procedures for operators, going as far as nominating facial recognition technology as a mode of verification. It also promises to crack down on unlicensed operators by restricting advertising rights in Brazil and preventing business-to-business (B2B) partners from supplying technology to unlicensed business-to-consumer (B2C) entities. In addition to these measures, the bill plans to eliminate bonus promotions.
Brazil’s legislative journey towards legal sports betting and casino activities has been long and eventful, with key moments like the approval of PM 1,182 by the government in May, which President Da Silva subsequently legislated in July. However, the initial reception of the PM was lukewarm at best, with concerns over high taxation, restrictive advertising, and murky payment regulations. Consequently, Bill 3,626/2023 entered the scene, bringing with it amendments including the headline-grabbing addition of online casinos and tax rate revisions—transforming the Brazilian gambling landscape one legislative chapter at a time.
