On July 6, 2022, Bill 1.153/2019, authored by Senator Veneziano Vital do Rêgo (MDB-PB) and rapporteur by Deputy Felipe Carreras (PSB-PE), which seeks to update the rules that regulate the practice of sports in Brazil, was approved by the Chamber of Deputies. Among its proposals, the it brings some relevant changes that affect the operation of fixed-odds sports betting in the country, which will be briefly discussed below.
The first relevant change concerns the amendment of article 30, §1-A, item IV, of Law No. 13,756/2018, which transfers 1% (one percent) of the betting operator's GGR (Gross Gaming Revenue) to entities that historically promote sport in Brazil, such as the Brazilian Olympic Committee, Brazilian Paralympic Committee, Brazilian Club Committee (CBC), Brazilian Confederation of School Sports (CBDE) and Brazilian Confederation of University Sports (CBDU).
The Legislative's justification for this change stems from the understanding that “the eventual migration from traditional lotteries to this new type of bet could generate a significant decrease in resources destined to entities that historically promote sport in Brazil”. In other words, it is an assumption that revenue from traditional lotteries would be reduced, while fixed-odds bets would increase.
Since 2019, I have been alert to the situation we currently find ourselves in: the longer the regulation of sports betting takes to come out, the greater the chance that the Legislature will increase taxation/transfers from operators. This is because betting operators are growing, attracting Brazilian bettors and investing considerable amounts in advertising in Brazil. If so much money circulates in this industry, why not raise the taxes they will collect in Brazil, right?
However, it should be noted that the regulation of sports betting seeks, in particular, to absorb unlicensed operators into the licensed market. The main objective of the regulation is to create fertile ground for operators to want to obtain a license here and, with that, the State to collect taxes. If the burden of licensing in Brazil exceeds the bonus, operators will continue to explore the gray market – and public coffers will remain without collecting relevant figures.
Another relevant point of Bill 1,153/2019 was the inclusion of §4 in article 29 of Law No. 13,756/2018, which provides the following:
“§4º Any form of publicity or advertising of companies, without a legal representative in Brazil, that explore bets related to real sports-themed events is prohibited.”
Such a determination already exists in the drafts of the regulatory decree of Law 13,756/2018, so it is not new in the industry. However, any enactment of Bill 1,153/2019 before the regulatory decree is sanctioned will lead to an uncomfortable situation, in which betting operators would not be able to advertise in Brazil and, at the same time, would not be able to license themselves. Thus, we would have an activity (i) legalized, under the terms of Law 13,756/2018, (ii) that could not (in theory) be explored in Brazilian territory due to the absence of regulation, and (iii) whose advertising is prohibited by law.
Now, Bill 1.153/2019 will return to the Federal Senate for a new vote, as its text has undergone changes. We can only wait for the scenes of the next chapters.
Udo Seckelmann
Lawyer at Bichara e Motta Advogados. LLM in International Sports Law at the Instituto de Derecho y Economía (ISDE) in Madrid, Spain. Editor and editor of Lex Sportiva, an international blog on Sports Law. Member of the National Academy of Sports Law (ANDD) – Youth Commission. Member of the Sports Law Commission of OAB/Barra (RJ).
Source: Exclusive GMB
