Legal online gambling and sports betting to benefit Brazil

Regulated gambling activities across the globe offer a legal form of entertainment for gamblers while raising proceeds in the form of tax revenue. Across Europe and North America, many countries have already implemented robust regulations for online gambling and sports betting, ensuring consumers can enjoy such activities legally. Countries in Latin America are closely following this trend despite some delays that are observed.

Online gambling launched in Colombia several years ago, in 2017. Since then, the interest in iGaming activities has only been growing. Similarly, Panama, Mexico and some provinces in Argentina have also implemented licensing for online gambling.

Besides iGaming, many Latin American countries, including Brazil, have already identified the potential of sports betting. The activity has been growing in popularity across North America, with more than thirty US states offering legal sports betting. Different forms of wagering on sports are also legal across Canada, allowing bettors and sports fans alike to legally place bets.

Following the same trend, Latin American countries, such as Brazil, Chile and Peru, among others, are currently in the process of establishing regulations for online gambling and sports betting. If lawmakers in those countries continue their efforts, it is likely that such forms of gambling activities to become available as soon as next year. Still, potential delays are possible, considering the complex nature of legalization and the establishment of rules for licensing.

The gambling sector across Latin America has significant potential

The potential of the online gambling sector across Latin America is valued in billions and is expected to grow significantly in the next few years. According to a recently released report by Vixio Regulatory Intelligence, the regulated iGaming market across Latin America is expected to skyrocket by 2027, quadrupling its size to hit $6.75 billion.

The white paper, titled Vixio's Latin America Online Outlook report, projected that the implementation of new laws and regulations in multiple key markets will help drive this growth. Vixio's report hinted at launches of online gambling markets in 2024 for countries such as Brazil, Chile and Peru.

Focusing on Brazil, the report underlined the potential of the gambling sector in the country. The recently released report predicted that casino, bingo and online sports betting in Brazil would be worth some $3 billion by 2027. Moreover, the report predicted that Brazil's regulated gambling market would quickly position itself among the largest in the world.

James Kilsby, a chief analyst for Vixio and co-author of the recent report, spoke about the efforts of lawmakers across Latin America toward the legalization of online gambling. When it comes to Brazil in particular, he said: "Recent activity in Brazil’s Congress has sharpened minds across the global industry as to the potential of this major new market, but at the same time the Brazilian market is likely to be highly complex from a regulatory perspective and the final scope and scale of the opportunity will be determined by the policy decisions due to be made lawmakers and government officials, including President Lula, before this year is out."

Legalization of sports wagering and iGaming gains traction in Brazil

The ongoing efforts of lawmakers in Brazil may finally pay off, considering a bill that recently gained significant traction. Bill PL3626/23, proposing the regulation of online gambling and sports betting was assessed by the Brazilian Senate earlier this month. After a majority of the Senate voted against the bill's text for iGaming, the proposal was returned to the Chamber of Deputies, who had to review and vote on it once again.

In an unexpected turn of events, the Chamber of Deputies last week approved Bill PL3626/23. Despite the Senate's efforts to remove the part of the proposal that included online gambling, an overwhelming majority of the Deputies voted in favor of iGaming. According to a statement released by the Chamber of Deputies' camera, only 120 members voted against iGaming while a majority of 261 votes supported online gambling within the proposal.

In light of the recent approval, now, Bill PL3626/23 is now heading to the desk of President Luiz Inácio Lula da Silva. In order for the proposal to become a law, it would require a final signature from the President. While legal online gambling and sports betting have never been closer, the future of the activities is yet to be determined by Brazil's President. With that in mind, given Lula da Silva signs off on Bill PL3626/23, the country may offer legal sports wagering and online gambling as soon as next year.

Under the proposal that gained traction, the Ministry of Finance will be in charge of the gambling activities. The bill calls for a tax rate for gambling operators at 12% of their revenue. Similar to other jurisdictions, players are also subject to paying taxes on their winnings and per Bill PL3626/23, that tax would be 15%. It's no surprise that to operate in Brazil, betting and iGaming operators would be subject to a license fee. Under the proposal that was recently greenlighted by the Chamber of Deputies, the gambling operators would pay BRL 30m or approximately $6.2m to secure a license that is valid for five years.

Despite the benefits of legal sports wagering and online gambling, not everyone agrees with the proposed change in Brazil. Opposition in the country previously warned about the dangers of expanding gambling, citing potential issues such as gambling-related crimes and excessive gambling.

While PL3626/23 is awaiting approval from Brazil's President, opponents vowed to continue their efforts against the expansion of gambling or at least repeal the part of the proposal that establishes online gambling activities. Despite the plans of the opponents of legal betting and iGaming, the future of the activities remains in the hands of the country's President.

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