The project returns to the Chamber of Deputies for analysis, as it has undergone substantive changes by the senators. The expectation of Finance Minister Fernando Haddad's team is to raise at least R$2 billion (US$ 404m) with the measure in 2024, in a preliminary estimate. The text introduces a 12% tax on the income of online sports betting platforms and 15% on the prize for individuals.
According to members of the Treasury, the betting companies themselves estimate annual revenue of around R$100 billion (US$ 20,2bn). The numbers are similar to the survey by the online betting platform Mr. Jack.bet, which estimates that, by the end of the year, companies in the sector will generate R$120 billion (US$ 24bn) in Brazil, which would mean an increase of 71% compared to 2020.
Football, the most popular sport in the country, is also the favorite when placing bets, with 85.7% of preferences among Brazilians. The government has so far managed to identify at least 300 domains (internet sites) operating in the country. The same company can have more than one website. As a result, the estimated number of CNPJs in the sector is around 130.
Currently, six out of every ten Brazilians placed bets online in a period of six months, according to a survey by Playtech, one of the main software providers for betting. In Brazil, 52% of bettors reported having already received warnings about "high levels of gambling", with 38% admitting to having taken a break or reduced activity after receiving these warnings, the study showed.
Some betting companies claim that they have already installed tools with the aim of combating betting addiction. Esportes da Sorte, a platform that sponsors ten clubs in series A, B and C of Brazilian football, tries to help with the emotional and financial control of bettors.
“We always emphasize in our institutional communications that gambling is a form of entertainment and must be approached responsibly, without misleading promises of easy and guaranteed profit,” says Darwin Filho, CEO of Esportes da Sorte.
Responsible gambling
He states that, among the tools, the platform included some that limit expenses and also restrict usage time. There are also temporary restrictions and even permanent bans in extreme cases, in addition to offering psychological support through partnerships with institutions to anonymous players who show characteristics of compulsive gambling.
Bet7K CEO, Talita Lacerda, explains that the platform has a page on the website with information about "responsible gambling", as well as the possibility of account blocking, and a specialized risk analysis team to identify cases of compulsive behavior.
“Our service and support team is trained to identify and welcome players with betting problems, following internal procedures so that these cases are properly forwarded and treated,” she says.
Finance Ordinance created first rules
The Ministry of Finance published an ordinance to regulate advertisements and the behavior of companies in the betting sector. The rule requires companies entering the country to respect rules as an incentive for responsible gambling.
The text also prohibits the entry of players, technical committee, referees and managers into the corporate structure of the operating companies. The Minister of Finance, Fernando Haddad, also negotiated shares with the Brazilian National Council for Advertising Self-Regulation (Conar).
Measures such as age restriction notices using the “+18” symbol or “prohibited for under 18s” notices must appear on websites. Platforms will also not be able to say that bets are for "personal gain" and bets cannot be treated as a way to "make money".
Time control on platforms
Betting companies must also have control mechanisms such as time limits dedicated to betting and losses. The problem, according to experts, is that it is the betting companies themselves who must take these precautions.
A study carried out by Tendências Consultoria, at the request of the Brazilian Institute of Responsible Gaming (IBJR), showed that high taxes result in more players being directed to the illegal betting market.
The partner and director of Tendências, Eric Brasil, responsible for the survey, says that Brazilian regulation should seek to achieve a level of taxation more consistent with that practiced in other countries.
One of the models identified as "ideal" for this segment is that of England. There, where the online betting market has been regulated for over twenty years, the rate is 15% on the "Gross Gaming Revenue" (GGR), which is the revenue obtained from all games after paying prizes to players and income tax (IR) on the prize.
The operator also does not need to have a tax headquarters in the country. Furthermore, a wide range of games and betting types are permitted. The license cost is lower for smaller operators, which reduces barriers to market entry and increases competition in the sector.
Brazilian regulation is inspired by other countries
For Eduardo Diamante Teixeira, partner at Carlezzo Advogados and specialist in sports law, the regulations being proposed in Brazil mirror, to a large extent, the models adopted by other countries, especially in the strict rules for licensing companies and measures to avoid clandestine and illegal gambling.
But, compared to the legislation of other countries, such as England, for example, the regulation proposed in Brazil is flawed on the tax issue.
“While other countries tax bets at 15% on gross revenue (GGR), in Brazil there is discussion of a rate that could reach 18% on gross revenue (GGR), in addition to taxation on bettors, which could also reach 30%. about the annual award received,” says the lawyer.
Colombia created rules in 2015
In Latin America, Colombia was the first country to establish rules for online betting in 2015. A supervisory body for the sector was even created — Coljuegos. There is no limit to the number of betting sites and licenses are valid for three years, with a possible extension for another five years.
Tax rates vary between 2.5% and 15% of the value of the credit that each bettor deposits into their account. Bettors' profits, above a certain value, are also taxed at 20%. Between 2018 and 2022, the size of the sector almost sixfold in that country, where there are currently more than 8 million active accounts on betting sites.
Spain has had rules for more than ten years
In Spain, the rules for online betting were created in 2011. A 20% tax is applied to platform revenues. To grant licenses, there must be at least one permanent representative on Spanish territory. Permissions have a term of ten years, which can be extended for an equal period.
Football teams, however, cannot display sponsorship from bookmakers on their shirts, the same procedure adopted in Italy where episodes of game manipulation involving sports betting took place. Therefore, the legislation became tougher.
The presence of Italian companies in the segment was reinforced, taxation of company revenues increased (currently ranging from 18% to 22%), and limits were imposed on the amounts paid to bettors. Italians are also concerned about gambling addiction.
There are bills being voted on in Parliament that create a fee that would be charged to companies to pay for addiction treatment and prevention measures, with a particular focus on young people aged 18 to 24 who, according to research, are at greater risk of harm.
Source: O Globo
