A major leap in Brazil’s betting Sector with new tax regulation
Brazil is poised to take a significant step in its sports betting industry. A pivotal move was marked by the Economic Affairs Commission’s (CAE) approval of Bill 3,626/23, which proposes a reduced tax rate of 12% for sports betting. This decision, made on November 22, 2023, is a crucial milestone in regulating the industry.
The Resilience of iGaming
In a remarkable turn of events, attempts to exclude iGaming from the legislation were unsuccessful. This development underscores the robustness of the online gaming sector in Brazil, ensuring its continued presence alongside sports betting.
Next Steps in the Legislative Process
The bill’s passage by the CAE sets the stage for a Senate plenary vote scheduled for November 28. Should the Senate amend the bill, it will return to the Chamber of Deputies for further review. Notably, the bill had already been approved by the lower chamber in September.
Tax Distribution: A Closer Look
Under the new framework, operators will retain 88% of the revenue, with 12% allocated to the Brazilian government. The tax distribution includes significant portions to sports, tourism, public safety, education, social security, and health sectors, ensuring a comprehensive benefit to various societal aspects.
Future Regulatory Landscape
The CAE’s bill approval signifies a potential shift in sports betting regulation in Brazil. Along with reducing the tax on Gross Gaming Revenue (GGR), the bill proposes a decrease in the taxation on bettors and changes in the licensing fee and terms.
Operator Requirements and Cybersecurity
Prospective operators must gain approval from the Ministry of Finance and meet certain criteria, including having a Brazilian partner and robust cybersecurity systems. The bill emphasizes the need for advanced identification processes, such as facial recognition technology, to ensure security and prevent underage betting.
Restrictions and Advertising
The bill stipulates stringent rules for unlicensed operators, including advertising bans and prohibitions on technology provisions for unlicensed B2C companies. Additionally, bonuses are set to be banned.
Brazil’s Sports Betting Journey
Brazil’s journey toward sports betting regulation has been eventful. The provisional measure (PM) for sports betting, signed into law in July, laid the groundwork for the current developments. Bill 3,626/2023 further refined these measures, representing a significant evolution in Brazil’s approach to sports betting regulation.
