Brazil’s Finance Ministry has begun rolling out regulations for the sports betting industry. Reuters reports that one of the most significant is the requirement that sportsbook companies be headquartered in the country.
In addition, each operator will need to pay R$30 million (U.S. $5.75 million) for a five-year license.
Finance Minister Fernando Haddad has set the deadline of March 31 for the Provisional Measure that regulates sports betting to be published.
Since sports betting was legalized in 2018, sportsbook companies have largely operated in a Wild West environment, untaxed and untamed. However, in addition to forcing the companies to be based in Brazil, Haddad has ordered the creation of oversight mechanisms to fight manipulating of sports matches and money laundering—and perhaps most important to the government—to require the companies to begin paying taxes.
The ministry released this statement: “The regulation will require that betting companies are based in Brazil.” It will also “[improve] the supervision, collection and dialogue with the agents that operate in the sector.”
The government has not clarified whether simply maintaining a local headquarters will be sufficient to meet this requirement.
The ministry statement continued, “Lack of regulation and collection of taxes also caused Brazil to fail to structure and maintain a monitoring network of suspicious behavior.”
The money collected could be as much as $385 million to $1.54 billion each year. The exact mechanism for doing this was left unstated.
Currently anyone can make a sports bet using a cell phone.
According to ministry information, as many as 500 gaming companies operate in Brazil. Once the regulations go into effect the government anticipates that just 10 percent of those will remain in the market.
