Brazil’s Senate beat pessimistic expectations and passed a bill setting regulations and tax rates for sports betting before the end of 2023, Reuters reported December 12.
The government anticipates reaping about 1.65 billion reais ($332.27 million) annually beginning next year. After several months of delays the Senate Plenary approved the legislation on December 12.
Now, Bill 3.626/2023 awaits final action by the Chamber of Deputies and the signature of President Luiz Inácio Lula da Silva before it can become law. The lower house requires one more pass on the bill because the Senate made a number of amendments that will have to be approved so that both versions of the bill are reconciled.
The two chambers have until the end of the year to reconcile their differences to make it into next year’s budget. Both go into recess after that and they don’t return until February 1.
The law includes a 12 percent tax on revenue for online betting operators and 15 percent on winnings paid to bettors. Operators are required to pay a 30-million-real ($6.04 million) license fee to operate in Brazil.
One of the amendments to the original bill was to lower the 18 percent tax rate. The tax on winnings was originally 30 percent before being lowered to 15 percent. The income tax rate on fantasy sports winnings was also changed, from 27.5 percent to 15 percent. The bill also spells out that fantasy sports do not constitute an exploitation of the lottery.
Other amendments include prohibiting slot machines and brick-and-mortar casinos, while another removes online gaming from being regulated in the bill.
However, if that amendment sticks, government sources say revenues will be severely curtailed.
In another vote, Senators voted 36 to 25 to allow sports betting advertisements in sports stadiums and sponsorships of athletes by gaming operators.
Taxes raised on sports betting would be divided among different government ministries, with 2 percent for Social Security, 6.63 for sports, and 5 percent for tourism.
In the future, the operator will require authorization from the Ministry of Finance, which will be able to issue such authorizations for up to five years, renewable. Such operators will have to have an administrated headquarters registered in Brazil, and have at least one member of its board or control board having accredited knowledge in gaming, or lotteries, including technical expertise.
Advertising and promotional media must include warnings about gambling harms, and ads that show gambling in a socially attractive light or employ celebrities are not allowed. Similarly, ads that give the impression that odds of winning are favorable, or that gambling is a substitute for working, are not allowed.
Sporting events that could be wagered upon will have procedures for fighting match fixing and corruption.
Operators will be required to have procedures in place to fight money laundering by requiring IDs and verification of bettors. One amendment to the original bill included the use of facial recognition for players to help in collecting taxes on winnings.
The list of those who are banned from betting include minors, public agents connected with regulating or supervising gambling, those with access to the lottery’s computerized system, sportsmen and other members of sports.
Violations can bring penalties that include warnings and fines of between $10,000 and $404 million. They include suspension of being able to gamble or operate, for up to 180 days for gambling itself, and up to 10 years for an operator.
