Proposal received broad support in floor vote, including from conservative evangelical caucus
09/14/2023
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Adolfo Viana — Foto: Pablo Valadares/Câmara dos Deputados
The Chamber of Deputies, Brazil’s Lower House, passed on Wednesday a bill that regulates sports betting in Brazil and also legalizes gambling on online platforms, such as casinos and internet bingos. The measure attracted broad support in the floor vote. The text will now be sent to the Senate for urgent consideration.
The government’s proposal was only aimed at betting on sports events, which was authorized by a 2018 law that was never regulated, but the opinion of Congressman Adolfo Viana expanded it to legalize betting on virtual events in fixed-odds online games (when the bettor knows in advance how much he or she can win, unlike lotteries, in which the prize depends on the number of bettors).
“Today, it’s not a matter of whether or not to allow online gambling. It’s about regulating an activity that exists across the country,” said Mr. Viana. Brick-and-mortar bookmakers, he said, will still be banned, except for those selling sports betting tickets. There is controversy, though.
According to lawyer Tiago Gomes, a partner at Ambiel Advogados, the law allows, “at most,” the creation of “a brick-and-mortar casino, but only with online games.” The authorization of the operation of online casinos is a concern of the sector, he said, since 60% of the current revenues of bookmakers come from this modality (which is currently banned in Brazil).
The rapporteur had also proposed an article giving the Ministry of Finance the power to regulate other types of betting by decree, but this was removed in an agreement with the evangelical caucus. The group — which last year was the main opponent of the bill to legalize gambling — made little noise this time.
“We evangelicals will always be against what is bad for the health of the Brazilian family. Countless people have ended their lives because of gambling addiction,” said Congressman Sóstenes Cavalcante. “However, as we acknowledge that this plague of online gambling has taken over Brazil, we understand that controlling and taxing it will at least curb this addiction from continuing to grow,” he said.
The government fully supported the expansion of the proposal in terms of revenue and managed to get the support of the majority of the lawmakers to maintain the proposed tax. The bookmakers will pay 18% of the so-called gross gaming revenue (GGR), and the bettor will pay 30% income tax on the winnings of each bet, without the possibility of deducting it from other operations in which they have lost.
Lawyer Tiago Gomes said that the companies were frustrated as they had expected a reduction in rates, but that the figures were in line with what the government had advocated. “The argument is that sports betting is not an economic activity, it’s a form of leisure. Those who bet for fun, which is the bulk of betters, won’t worry about finding a VPN to bet in Malta because their tax bill will be lower at the end of the day,” he said.
Another setback for bookmakers was the agreement between the parties that the operating license should only last for three years. The sector was trying to extend the five years, as discussed by the Ministry of Finance, to 10. On the other hand, the value of the license, R$30 million, was established by law and not by decree, which makes it more difficult to change.
The bill also forbids a common practice of these companies: the offer of a bonus or prior advantage to induce customers to place a bet.
In the plenary and the corridors of the Lower House, the main debate was about who would spend the multibillion revenues that would be raised. The rapporteur reduced the funds for social security to 2% from 10% and shared them between the tourism ministry, sports ministry, and tourism promotion agency Embratur.
*Por Raphael Di Cunto, Marcelo Ribeiro — Brasília
Source: Valor International