Sports betting is finally regulated in Brazil. President Luiz Nacional Lula da Silva sanctioned Law No. 14,790 last Saturday (30), which arose from Bill No. 3,626.

The decision was published in an extraordinary edition of the Official Gazette of the Union (DOU). The regulation of betting was approved with vetoes by the executive branch.

One of the main changes was the veto of the article that established tax exemption for bettors on prizes below R$2,112. The tax was maintained at 15%.

The initial text sent by the Presidency of the Republic included a 30% tax on gamblers. The change in the rate was made during the review by the Federal Senate .

The vetoed sections will be analyzed in a joint session of deputies and senators, who can maintain or overturn the presidential vetoes.

Vetoes

In addition to removing the exemption bracket, President Lula also vetoed the section of the project that determined that taxation on bettors would be calculated on the net prize.

The text considered as “net prize” the positive result obtained in fixed-odds bets made each year, after deducting losses incurred in bets of the same nature.

In the text of the bill, the tax on gamblers would be calculated annually and paid by the last business day of the month following the calculation. The section was also vetoed and the Federal Revenue Service will have to determine the frequency in which the tax will be calculated.

The vetoes were justified by the Presidency of the Republic to maintain tax equality.

“It would result in income tax being levied differently from that applied to other lottery modalities, thus creating a difference in tax conduct,” argued the Executive.

Regulatory process

Brazil was going through a long process to regulate sports betting. The practice was legalized in 2018, with the sanction of Law No. 13,756 by then-President Michel Temer.

Learn more: Understand How the Legislative Process Works in Brazil

The law defined that a new law should be approved within two years, extendable for another two, to regulate the market, which was not done during the Bolsonaro government.

In July of this year, the federal government published Provisional Measure No. 1,182/2023 , with rules for regulating the sector.

Bill No. 3,626, which incorporated rules from the Provisional Measure, was also sent to the Chamber. The text was approved by the Chamber in September and by the Senate in December.