Brazil’s government plans to submit a proposal for the regulation of sports betting

In April, there were expectations for the regulation of sports betting through a provisional measure. Now that period has passed, and the government has announced that the regulation will be released in the upcoming days.

On May 4th, Senator Jorge Kajuru announced that the government of President Luiz Lula da Silva will propose a regulation of sports betting houses and taxation to the National Congress in the upcoming days.

The regulation will take effect immediately through a provisional measure but will still need approval from both deputies and senators within a 120-day timeframe. Kajuru also stated that he will be the rapporteur for the measure. This year, the senator, along with Hamilton Mourão, introduced a bill outlining regulations for companies offering betting services.

“The government has introduced a provisional measure to regulate and tax sports betting houses. Although there is already a bill on this topic in the Senate, the government has chosen me to be the speaker,” stated Kajuru.

The senator is advocating for a milder proposal than the one presented by the government’s economic team, headed by Finance Minister Fernando Haddad, which proposes a five-year operating license fee of R$30m (USD6.0m) for websites.

Kajuru believes that some people in the industry are willing to pay taxes and do not want to evade them, but they are opposed to exorbitant license fees like the ones proposed by Minister Haddad.

Therefore, Kajuru’s proposal is to have license fees based on the size of each sports betting house. “Minister Haddad was very understanding and open to a discussion,” added Kajuru.

According to Kajuru, sportsbooks have a responsibility to pay taxes, and there is a need to protect bettors. The senator also expressed his intention to incorporate regulations on advertising these services, with the goal of mitigating the risk of gambling addiction while also safeguarding the interests of betting houses. “It is not sufficient to regulate; we must have a framework that ensures people facing financial difficulties do not succumb to crisis,” emphasized Kajuru.

The provisional measure has undergone recent modifications

Sources from the economic team have recently stated that the provisional measure will undergo a reformulation after a series of negotiations with the Minister of Sport, Ana Moser. As per reports in the Brazilian press, the revised version of the regulation will increase the charge to betting operators from 15 percent to 16 percent on the income generated from the games, less prizes.

The statement also mentions that the additional revenue generated from the reformulated provisional measure on taxation of online sports betting will be directed towards the Ministry of Sports to promote grassroots sports.

Under the revised regulation, the new 16 percent rate will be distributed in the following manner:

• 0.82 percent to primary schools
• 1 percent to the Ministry of Sports
• 1.63 percent to clubs, in exchange for the transfer of the name
• 2.55 percent to the National Public Security Fund
• 10 percent to social security.