If there are no changes, this draft proposal of the decree would be the definitive one and the signature of President Jair Bolsonaro is scheduled to take place before May 10.
The exploitation of sports betting will depend on authorization from the Federal Executive Branch, with no limit to the number of authorizations and will be carried out by legal entities governed by private law that offer the service to bettors located throughout the national territory.
According to the decree, the model to be adopted is that of authorization, in which the applicant must submit the request for operation together with the documents listed in the document.
The competence to authorize, regulate, supervise and inspect sports betting will be the responsibility of the Ministry of Economy. The document does not deal with the creation of a body for this purpose, which is assumed, at first sight, that SECAP will be responsible for such attribution.
The competence to authorize, regulate, supervise and inspect sports betting will be the responsibility of the Ministry of Economy. The document does not mention the organization that has this attribution but it is certain that it will be within the new Undersecretariat for Special Affairs, Lottery and Export Processing Zones (see changes below).
The regulatory body will have 30 days to review the documentation and notify the interested party to submit the final documents. Within 60 days, the regulator must complete the analysis on the granting of the request.
Companies operating in Brazil, when the decree is published, will have conditions and deadlines “not less than six months to comply with the provisions of the legal document.”
The authorization will be valid for five years and, in order to obtain it, the decree requires the prior payment of R$ 22.2 million (US$ 4.5m) as a fee.
The draft decree stipulates the documents to be presented to the regulator in order to obtain the authorization to operate, including proof of technical qualification, provision of bank or financial guarantee and international certification of its systems, among other requirements.
For foreign companies to operate in Brazil, they must have a branch in the country and sufficient capital and economic and financial capacity to support the activity to be carried out. At least four company professionals must be designated to handle the Brazilian operation.
The decree defines issues such as the deadline for the payment of prizes, conditions for payment of the social security contribution and amounts related to social transfers, as well as the payment of income tax on the award.
The income tax rate was not mentioned in the decree. It only defines what will be on the "win", being "the difference between the value of the prize minus the amount bet or the sum of the prizes minus the sum of the values bet when dealing with identical bets made on the same event."
It is also defined that in both physical and virtual bets, the identification of those who present themselves to place the bet, in their own name or in the name of a third party, will be required, including the provision of the registration number in the Individual Taxpayer Registry – CPF and, if a foreigner, passport or official identification document, the foreign gambler's country of residence and his Tax Identification Number (NIF).
Responsible gaming
The wording of the decree was concerned with issues such as the promotion of informative and preventive actions to raise awareness of gamblers and prevention of pathological gambling disorder, through the elaboration of codes of conduct and dissemination of good practices. Among other actions, international certifications on responsible gaming will be required from the operator.
In addition, sports events subject to bets must have actions to mitigate results manipulation and corruption in real sports-themed events.
The operator must prove to the Ministry of Economy, prior to the start of the commercialization of bets, that it integrates or has a contractual relationship with international bodies for monitoring sports integrity.
The exploitation of sports betting, by the decree, is conditioned to the adoption and implementation of policy, procedures and internal control aimed at preventing money laundering and terrorist financing and fraud prevention.
The document, which deals with art. 29 of Law 13,765/2018, defines the activity as "an exclusive public service of the Union, exploited exclusively in a competitive environment, throughout the national territory."
In the draft, fixed-odds bets are defined as “a lottery modality that consists of a betting system related to real sports-themed events, in which it is defined, at the time of placing the bet, how much the bettor can win if the prediction is correct.”
Changes within the Ministry of Economy
Decree 11,036/22, which restructures the Ministry of Economy, marks that as of today (May 2), the Secretariat for Assessment, Planning, Energy and Lottery (SECAP) will no longer be part of the Special Secretariat for the Treasury and Budget (SETO), and will join the Special Secretariat for Productivity and Competitiveness (SEPEC), led by Daniela Marques Consentino.
Within SEPEC, the Competition Advocacy Department, managed by Geanluca Lorenzon, will be in charge of the new Special Affairs Department, Lottery and Export Processing Zones, responsible for regulating, authorizing, and supervising all lottery modalities, among other things.
Source: Exclusive GMB
