Should betting houses obtain a Brazilian license?
Written by :
Heloisa Vasconcelos
Reviewed By :
Larissa Borges
Without current regulations in the country, betting houses operating in Brazil have licenses from other countries.
However, once market regulation is approved, operators will need to obtain a Brazilian license to prevent them from operating illegally.
According to a survey carried out by the specialized business management consultancy Hand, only 15% of companies currently operating in Brazil would be able to continue operating in the national market after regulation.
The company considered that only betting houses with a turnover of more than R$50 million would be able to adhere to the formalization.
Provisional Measure 1,182 , which expires on November 21, establishes a tax of 18% on operators’ earnings, in addition to the need to pay a concession fee of up to R$30 million, with a term of three years.
For experts interviewed by Aposta Legal Brasil , Brazilian regulations do not bring restrictions or requirements that deviate from the standard required by other countries, but the cost of obtaining a Brazilian license is a warning sign.
Most companies operating in the national market, including sponsors of football teams, only have the Curaçao license, one of the most accessible in the world.
Most common licenses
Licenses from Malta, the United Kingdom and Curaçao are the most common among betting houses operating in Brazil today.
The UK license is one of the most respected and rigorous on the market, and betting houses that have it are likely to meet the requirements requested by the Brazilian government.
The Malta Gaming Authority (MGA) is one of the most respected entities in the sector and oversees casinos that hold a Malta license.
Most houses only have the Curaçao license, which is considered one of the fastest and most affordable on the market.
“Naturally, because the license in Curaçao is easier, it is a less respected license in the industry, you are not subject to very deep regulatory requirements”, says the lawyer specializing in sports and betting at the Bichara e Motta law firm, Udo Seckelmann.
Among the 17 betting houses that sponsor teams in series A and B of the Brazilian Championship, 14 only have a Curaçao license .
Cheapest license
The fees for both obtaining a Curacao license and taxes are quite low compared to other countries that have regulated sports betting.
The founding partner of the Jantalia Advogados law firm and specialist in Gaming Law, Fabiano Jantalia, believes that just because a betting house currently has a Curaçao license does not mean it should not obtain a Brazilian one.
“ Curaçao is known for being a tax haven. In addition, it is a place where gambling taxation is low and you do not have many requirements such as the need for your own structure. ”
The economic bias, however, should weigh on the company’s decision to continue operating in the national market.
“The fact that it has greater or lesser difficulty here perhaps involves more of an economic and monetary value judgment than requirements here in the country, we are having the same requirements that are followed in other places”, he says.
For Udo Seckelmann, in addition to the financial decision, companies that only have a Curaçao license will need to adapt to obtain the Brazilian license.
“Houses with Curaçao can obtain a Brazilian license, they just have to adapt to Brazilian compliance requirements. Curaçao’s compliance requirements are very low,” he says.
He believes that the regulations being drawn up for Brazil make the Brazilian license similar to those of countries such as the United Kingdom and Portugal.
Comparison between licenses
The comparisons made by Aposta Legal Brasil consider what is contained in MP 1,182, which is the current legislation in force on the regulation of betting.
Bill 3,626, which is awaiting consideration in the Senate, may bring some changes, such as reducing taxes for gamblers and reducing the rate for companies.
Malta, the United Kingdom and Curaçao have different licenses depending on the type of business and activity. Only licenses for online sports betting were considered in the comparison.
| Brazilian | Curacao | Malta | UK | |
|---|---|---|---|---|
| Fees | Grant of up to R$30 million, with a term of 3 years | Application fee of €4,000 and annual fee of €12,000 | Application fee of €5,000 and annual fee of up to €35,000 | Application fee between £854 and £91,686 and fee up to £1,077,027, plus £200,000 for every £500 million of annual revenue |
| Corporate tax | 18% on GGR | 2% on earnings | 5% on GGR | Between 3% and 21% on profits |
| Tax for gamblers | 30% on earnings | Does not have | Does not have | Does not have |
| Minimum capital required | Not established | €34 thousand | €40 thousand | Does not have |
| Deadline for obtaining | Not established | Around a week | 30-50 weeks | Around 16 weeks |
| Need for local office | Yes | Yes | Yes | Yes |
| Money laundering prevention policies | Yes | Yes | Yes | Yes |
| Responsible Gaming Policies | Yes | Yes | Yes | Yes |
Perspectives for the Brazilian license
Given the costs for companies to regularize themselves in the national market, it is possible that some betting houses prefer to remain with only the Curaçao license , operating in markets that do not require their own license.
“ If the burden is too great, it may even be that the betting houses obtain the license but do not renew it after the end of the concession. ”
“The bill has standards that are compatible with what we see in other countries. What will determine its success or failure is precisely the level of charges that will be levied, taxes, inspection fees and social contributions. This will determine whether the establishments will continue to operate with a Curaçao license or whether they will actually come to Brazil,” says Fabiano Jantalia.
If companies currently operating in Brazil decide not to obtain a Brazilian license, they will be prohibited from operating in the country and even from sponsoring Brazilian football teams.
“For a long time, betting companies and sports entities have known that companies that are not accredited in Brazil will not be able to advertise,” highlighted the special advisor to the Ministry of Finance, José Francisco Mansur, in a live broadcast in October.