Sports betting was regulated in July 2023, 5 years after the activity was legalized.

This was done after President Lula signed the Provisional Measure on betting . In September, the Provisional Measure was included in a Bill (PL) by rapporteur Adolfo Viana (PSDB-BA).

Our team has gathered the most relevant news on the topic so that you understand the main changes that will come with the regulation.

Summary: what changes in the betting market?

According to Udo Seckelmann , sports lawyer at Bichara e Motta and Master in International Sports Law, the Brazilian betting market will continue to grow next year.

What changes for bookmakers?

Betting houses interested in operating in Brazil will have to pay a fee of R$30 million to obtain a 5-year license.

Furthermore, they must have an office in national territory, paying taxes and generating employment for Brazilians.

What changes for the economy?

By regulating betting, the government will be able to earn more by collecting taxes on activities.

But this is not the only benefit!

After all, if companies want to operate in the country, they will need to have an address and hire a team here.

Furthermore, public profits from betting must be passed on to other sectors, such as sports entities and sports incentive programs.

What changes for bettors?

At first, bettors should not be the most impacted by betting regulation.

What may happen is that not all websites operating in the country today are regulated, which may result in a reduction in the supply of platforms.

But we believe that the main bookmakers, with international reputation and trust, will continue to be interested in the market.

Regarding taxation, it is important to highlight that anyone who wins prizes above R$2,112 must pay a tax of 15%.

Remember that you need to declare your bets when filing your IRPF!

What changes for football clubs?

Football teams are paying close attention to the regulatory procedures.

This is because currently, 39 of the 40 clubs in Series A and B of the Brasileirão are sponsored by “bets”, that is, by online betting houses!

Clubs fear that high government charges could drive away clubs and harm sponsorship contracts.

At the same time, the Brazilian Football Confederation ( CBF ) is campaigning for the Ministry of Finance to change the amount that clubs receive from betting houses.

Read also: The Future of Brazilian Football with the Betting Law!

Currently, they are entitled to 1.63% of the platforms’ net revenue. The organization tried, unsuccessfully, to increase the rate to 4% of the houses’ gross revenue.

History of sports betting law in Brazil

To better understand what to expect from online betting in Brazil, it is important to understand the trajectory of regulation.

We have prepared a brief timeline for you to understand all the main milestones of the Betting Law in Brazil:

2018

In December 2018, Law 13,756/2018 was sanctioned by former President of Brazil Michel Temer.

At the time, the text made sports betting legal in the country, as long as it met certain requirements. The main one was that the bets had fixed odds.

From this, Secap (Secretariat of Evaluation and Lotteries of the Ministry of Economy) began to conduct a very robust research so that regulations could be established for the activity. The deadline to complete the work was 2 years.

2020

The initial deadline was not met, therefore, it was extended for another 2 years due to the pandemic in 2020.

At the SBC Digital Summit , for example, an online event that took place in May of the same year, several names in the segment came together to discuss the evolution of the market.

And, of course, one of the topics was the Brazilian licensing process for betting operators.

On the occasion, Neil Montgomery, partner and founder of Montgomery e Associados, commented that the COVID-19 pandemic significantly delayed market regulation.

2021

The market’s guess was that regulation would happen in 2021, but unfortunately the pandemic was not 100% controlled, which further delayed the process.

During this period, some important advances in the text of the regulation were made. One of them took place on July 15, 2021 and corresponds to the sanction of law 14,183, the result of provisional measure no. 1,034.

As a result, the taxation of sports betting in Brazil began to be based on Gross Gaming Revenue – GGR, which is the gross revenue minus the prizes paid to bettors.

The expected tax rate is approximately 20% , a more attractive amount for operators and potential investors.

2022

In May 2022, another initiative to accelerate regulation was carried out by the Ministry of Economy.

The entity sent a draft decree to the Civil House establishing some rules for operators to obtain authorization to operate in the country.

Among the relevant points of this draft, we can mention:

• The lack of limitation on the number of operators that can operate in the national market;
• Payment of a one-time fee of R$22.2 million for a 5-year license ;
• Authorization license template.

The authorization model is simpler and viewed positively by experts in the field.

However, the effort did not speed up regulation. To get an idea of ​​the size of the loss, the country lost more than R$3 billion in revenue from the World Cup due to the lack of a regulated market.

Read also: What will the Provisional Measure Regulating Betting in Brazil be like?

2023

The year 2023 began with a new government and new perspectives on regulation.

Finance Minister Fernando Haddad demonstrated, from the beginning, an interest in approving a Provisional Measure that would kickstart the process of regulating betting.

This is because the Income Tax exemption bracket has increased, causing a “gap” in the tax contribution: it is estimated that more than 13 million people will no longer pay income tax.

May 2023

In May 2023, the Ministry of Finance delivered the text of the provisional measure to President Lula. The main new features found were:

1. The Ministry of Finance will be responsible for monitoring the activity in Brazilian territory;
2. The movement of money between betting houses and bettors can only be carried out through bank accounts of institutions authorized by the Central Bank to operate in Brazil;
3. Some people will not be able to place bets, such as athletes and club directors;
4. Bookmakers will not be able to purchase television, internet or any other broadcast rights for sporting events;
5. The percentage of winnings allocated to bookmakers would be 84% (the value changed to 82% in the final text).

July 2023

Finally, after 5 years of waiting, sports betting was regulated. This happened with the signing of the Provisional Measure by President Lula.

The main change was related to the percentage of earnings allocated to houses, which decreased to 82%.

September 2023

In September 2023, the rapporteur of the betting bill, deputy Adolfo Viana (PSDB-BA), proposed changes related to the distribution of government revenue from fees collected from betting houses.

Furthermore, people registered with credit protection agencies will no longer be prohibited from betting, an item that was included in the MP signed by Lula.

The issue of advertising was also addressed. The guidelines will be drawn up by the Ministry of Finance, which will work with Conar to encourage responsible advertising that follows rules similar to those used in the cigarette and alcoholic beverage markets, for example. The idea is to highlight the harm and risks of betting on sports.

November 2023

In November, the text was submitted for approval by the Senate. Senator Ângelo Coronel was responsible for drafting the final version of the bill, with 22 amendments to the original text, including:

• Taxes for bettors, which would be 30% for prizes above R$2,112, are now 15%;
• Taxes for betting houses, which would be 18% on the GGR, are now 12%;
• Online casino sites have also joined the project, so they will be equally regularized;
• Only bank accounts based in Brazil will be able to receive prize amounts paid by bookmakers.

December 2023

The betting bill was approved by the Chamber of Deputies on December 22, 2023. The urgency in the vote occurred, mainly, because the government expects to collect taxes from sports betting as early as next year.

After a back and forth on online casino sites, which had been removed from the text by the Senate, the Chamber approved the regulation of the activity along with sports betting.

Can betting houses operate without regulation?

Betting houses that do not regulate themselves will be operating under an illegal scenario.

According to the Provisional Measure, only companies in the sector that obtain qualification will be authorized to carry out the activity in the country.

Furthermore, the federal government foresees that the regulations of sports competitions should prohibit the display of sponsorships by websites that are not based in the country.

The display of brands on team uniforms that are not duly registered in the national territory will be prohibited.

These companies are also expected to be unable to advertise on other channels, such as social media and billboards.