Brazil's Lower House clears new sports betting bill

Brazil has long been undergoing legislative changes in the way the country wishes to regulate its nascent sports betting industry. Now, a new bill approved on Wednesday in the Lower House, and passed onto the Senate, promises to have a significant impact on the country’s budget, helping Brazil raise an estimated $335.65m (1.65bn reais) in 2024 alone.

The considerations for a more comprehensive approach to sports betting do not only have to do with an additional windfall of revenue. They are similarly linked to legislators’ desire to plug another taxation hole which has resulted in tax evasion, as confirmed by the lower house’s leader, Jose Guimares. If successful, the current legislative endeavor wouldlead to a boost for the state’s coffers.

To clarify, sports betting is already legal in Brazil, but there have been some wrinkles in the language of the passage of the previous law, provisional measure No 1.182, which has been amended by Bill No 3626/23 – or would be, should the bill pass through Senate.

The provisional measure signed by Brazil president Luiz Inácio Lula da Silva, however, achieved one specific thing – it finally made sports betting legal in Brazil, after years of back-and-forth and either lack of support or political will to take a more determined stance on this fast-developing sector.

Bill No 3626, which is yet to get its day in the Senate, will maintain the current tax rate of 18%. However, there are some additional contributions, which industry observers have pointed out could push the total paid by companies to around 31%. In addition, any winnings above $430 will be taxed by 30%, which could lead to poor consumer channelization, industry observers grumble.

The new Bill though seeks to make some changes from the original, including the passage of a licensure and regulatory framework for online casinos, a vibrant part of the gambling industry that has been overlooked in many sports betting legalization pushes.

Not in Brazil, as the new Bill would try to also make it so that online games of chance are part of the regulatory regime sooner rather than later.

The bill even outlines the fees that operators would need to pay in order to set up shop in Brazil and roll out their products. All in all, Bill No 3626/23 aims to improve and expand the regulated gambling industry and ensure that the state gets its cut.

The collected tax proceeds will be used to boost sports, education ministries, the National Public Security Fund, social security, and more.

Image credit: Unsplash.com