Brazil's Chamber of Deputies is poised for a momentous decision as they vote on the latest iteration of sports betting regulations today. While the high tax regime, initiated by a provisional measure (PM), remains intact, the proposed changes introduce a groundbreaking addition: the legalization of online casinos.
Tax Regime Persists, Industry Reacts
Bill No 3626/23 seeks to amend the PM No 1,182, which was issued by Brazil's President Luiz Inácio Lula da Silva in July. If passed, the law would maintain the original 18% tax on gross gambling revenue, as established by the PM. However, industry experts point out that once additional mandatory contributions are considered, the effective tax rate will surge to a staggering 31% to 34%.
To add to the burden, the new law would impose a 30% tax on prizes exceeding R$2,112 (£342/€398/$427). The retention of these high tax rates undoubtedly presents a challenge for Brazil's gaming industry, which had previously voiced concerns over the PM's tax rates, labeling them as excessively high.
A Draft Forged Through Negotiations
This proposed law is a culmination of extensive negotiations and discussions in Congress, involving several of the 277 amendments to the original PM presented by Brazilian legislators. Deputy Adolfo Viana, tasked with crafting the bill, proposed it, although the government penned the text itself.
Due to Brazil's parliamentary schedule, today's vote is crucial for the bill's progress. If approved, it will advance to the Senate for final confirmation.
Inclusion of Online Casinos Marks a Pivotal Shift
One of the most significant changes in the new legislation is the incorporation of online gambling, a development welcomed by Brazil's gaming operators. The status of online casinos had remained ambiguous since the introduction of sports betting regulations.
According to the bill, players will have the liberty to place bets on online games, alongside traditional sporting events. An online game is defined as an “electronic channel that enables virtual betting in a game in which the result is determined by the outcome of a random future event, based on a random generation of numbers, symbols, figures, or objects defined in the system of rules.”
The bill also upholds the R$30 million license fee imposed on operators seeking to launch their offerings in Brazil.
A Step Forward with Room for Improvement
Deputy Adolfo Viana emphasized the bill's significance as a progressive step, although he acknowledged that more work may be required to address lingering issues. He stated, “The legislative innovations proposed by the executive branch are important and positive, but they do not resolve all the issues that, as we understand, are important and necessary to guarantee the fair and safe exploitation of fixed-odd sports betting in our country.”
Nevertheless, Viana urged lawmakers to approve the bill, emphasizing its role in expanding and enhancing the regulatory framework for gambling in Brazil.
The decision reached today holds the potential to redefine Brazil's gaming industry, ushering in a new era that combines sports betting with the exciting world of online casinos. Stay tuned as we continue to monitor these developments and their impact on the evolving Brazilian gaming landscape.