It seems highly unlikely that a bill to regulate sports betting in Brazil will come to a vote this year, Next.io reported. A pivotal vote in the Senate plenary was delayed from its original November 30 to December 6 and finally to December 12 due to a lack of a quorum—and might not happen at all in 2023. That will depend on Senate President Rodrigo Pacheco, who will decide the date for the vote.
The entire Congress goes into recess December 22 and returns February 2, 2024. For the bill to be included in the 2024 budget, it must be approved this year.
The path to regulated sports betting in the giant Brazilian market has been rocky and filled with potholes even though the activity has actually been legal since 2018. Nevertheless it remains one of the government’s top goals.
The Chamber of Deputies approved Bill 3,626/2023 September 13, forwarding it to the Senate. But the lower house’s inclusion of iGaming created a complication that has delayed passage in the upper chamber. It caused the Economic Affairs Commission of the Senate to almost delay its passage two weeks ago, before finally approving it. Some senators say they will not vote for the bill as long as iGaming is part of it.
The postponement came amidst last-minute amendments—more than 100 were offered total— and points of order, as well as a lack of a quorum, which would have made a roll call vote problematic.
According to Next.io, Senator Omar Aziz declared, “We are voting for online casino. It’s not just football, no. There will be slots, blackjack, roulette. There will be every type of game available in a casino.” He added, “We are voting for an online casino, without supervision. They will pay tax, the government will collect it and the bettor will lose out.”
Others fear “unsupervised virtual casinos.”
During the debate Senators Eduardo Girão and Magno Malta moved a postponement, which was accepted by the acting senate president in the absence of Pacheco.
In the Senate, the man responsible for shepherding the bill to passage, its rapporteur, is Senator Angelo Coronel, who told colleagues that sports betting has been legal for many years, but doesn’t pay taxes. He estimates that regulating it would bring as much as R$10 billion ($2.03 billion) into the treasury.
He said, “We are not creating any game modality. Bill 3,626/2023, initiated by the Executive Branch, regulates fixed bet games, which are legal in Brazil since the passage of Law 13,756 on 12 December 2018.” He added, “Currently, bets, despite being legal, are not collecting taxes in Brazil as they are not regulated.”
Coronel, reported iGaming Business, said that, besides Brazil, only Indonesia and Saudi Arabia have not yet regulated iGaming.
Those who have insisted on including online gaming in the bill make many of the same arguments, including that regulation is necessary for the industry to flourish. But opponents point out that the bill includes a taxation rate that could sabotage that goal. That includes a 30 percent tax on prizes that would be added to an 18 percent GGR taxation rate. They add that the effective revenue tax rate would reach 30.82 percent.
Several senators support that view, so they have offered amendments that lowered the prize tax to 15 percent and the revenue tax to 12 percent.
Opponents also point out that while the bill regulates sports betting, it includes no regulations for iGaming. Coronel has addressed that, saying online gaming is the largest potential tax contributor and so the government doesn’t intend to leave it out. It estimates it would collect from BRL 2 billion – BRL 6 billion a year (between $408 million – $1.2 billion) on online gaming.
Industry watchers remain optimistic that sports betting regulation is imminent, iGaming Business reports. Luiz Felipe Maia, a founding partner of the law firm of Maia Yoshiyasu Advogados, declared, “I sincerely believe we are moving closer to regulation,” says Maia. “In fact, I believe we are very close to the approval of the bill, with one critical element that was absent in the previous attempts: the weight of the government in favor of its approval.”
Maia said bettors will benefit the most from the regulator. Delays are to be expected. The 28th UN Climate Change Conference (COP28), caused several senators to be absent. “The government and those in favor of the bill are not willing to take risks in the vote and those against it are trying to block it, aiming to exclude online games,” he said. “It is definitely frustrating, but it is part of the democratic process.”
So, while delays in voting are discouraging to supporters, most feel that sooner or later they will get a chance to get the bill over the finish line and finally present it to President Luiz Inácio Lula da Silva to sign it into law.
