While the government acts to increase revenue, the Deputies Chamber president, Arthur Lira (PP-AL), threatens to install a Parliamentary Commission of Inquiry (CPI) to dominate the debate. Sector entrepreneurs are trying to take advantage of the moment to release all types of gambling.
The Planalto Palace decided to sign a provisional measure (PM) to regulate sports betting. The activity has been legal since 2018, but so far it operates in a gray market surrounded by illegalities and concentration of resources in tax havens. The intention of the economic team is to collect taxes on operations in Brazil and increase federal revenue.
The debate, however, does not stop there. Those in favor of gambling took the opportunity to press for the legalization of electronic games, casinos and bingos. Sports betting sites also offer online casinos and are gaining more and more fans. Defenders say that Brazil is losing revenue from an activity that, even if illegal, is already working at full speed.
Bribe
It was precisely gaming that threatened Lula's first term, in 2004. That year, the first case of corruption involving a member of the PT government came to light. Waldomiro Diniz, Deputy Head of Parliamentary Affairs, a trusted man of the then Minister of Civil Affairs José Dirceu, was recorded asking for a bribe from the bookie Carlos Cachoeira. With the scandal, Lula rushed to sign a provisional measure prohibiting the exploitation of bingos and slot machines.
Now, in his third term, the president enters the discussion again, this time kicking off the regulation of sports betting and resurrecting a stronger lobby for the legalization of gaming. The provisional measure on the subject has been ready for at least three weeks, but has not yet been published because it has started to receive criticism from Congress, bettors and the main football clubs.
The movement towards taxing matches affects a market that already represents the third largest source of sponsorship for Brazilian football clubs, behind only banks and civil construction. Sports betting sites already lead the master sponsorship of Serie A teams of the Brazilian Championship, occupying the noblest place in advertising on the players' uniforms. The sector calculates that Brazilians now make up the second largest audience of sports bettors in the world, behind only the United States.
Crime
There is no official data on how much the segment moves in Brazil. Projections vary from R$ 10 billion (US$ 2b) to R$ 100 billion (US$ 20b) in a single year, according to bookmakers. The advance was accompanied by crime. The Public Prosecutor's Office began investigating a series of match-fixing. In some cases, players were accused of receiving more than R$100,000 (US$ 20,000) for committing a foul during a match. In another recent episode, an athlete from Grêmio bet on a match for his own team.
The Minister of Finance, Fernando Haddad, calculates that the measure will generate up to R$ 15 billion (US$ 3b) in revenue per year for the public coffers. The government promises to charge R$ 30 million (US$ 6m) from each company that wants to operate sports betting in Brazil for a five-year license, in addition to charging 15% in taxes on the platforms' profits. The gambler, in turn, will have to pay 30% taxes on the prizes he wins, even though he may lose that amount in a subsequent bet.
There is a fear that these charges will cause businessmen and bettos to continue working and gambling illegally, moving money abroad. To the same extent, the government decided to rescue Lotex (Exclusive Instant Lottery), known as scratch-card, which has been out of operation for five years and will be sold exclusively by people with disabilities, according to the Ministry of Finance.
The sector's lobby was explicit during a public hearing in the Chamber, last Wednesday (12). The Ministry of Finance and businessmen were called to discuss the taxation of bets. Everyone agreed to regulate the activity, but there was a dispute over the scope of taxation, treatment between large and small companies and gamblers and who will be the main negotiator of this proposal in public power.
The president of the Chamber acts to lead the discussion and increase the bargaining power in the negotiations. Arthur Lira is a fan of gaming. In this year's carnival, he escaped the traditional revelry of Brazilian cities and went to Las Vegas, the biggest betting center in the world. Allies of the deputy pressure the government to give up the provisional measure and defend that the taxation be defined by means of a bill for the Chamber, which hands over the power of negotiation to the President of the House.
Another threat from the deputies is to change the government's proposal and increase taxation, placing taxes on the companies' gross profit, and not on the net profit, which in practice increases the resistance of these companies and forces a greater lobby during the approval. For this reason, businessmen in the sector fear being held hostage by Lira and the ‘Centrão’ party when discussing regulation.
"By the model they want to do, the provisional measure is unconstitutional," said deputy Wellington Roberto (PL-PB), one of the main leaders of the bloc and Lira's ally. To Estadão, the parliamentarian said he had criticized the special advisor of the Executive Secretariat of the Ministry of Finance, José Francisco Manssur, who participated in the preparation of the provisional measure.
CPI
In addition to the pressure to control the taxation project, Lira endorsed the installation of a Parliamentary Commission of Inquiry. The CPI aims to investigate the manipulation of matches in football through online betting. The target is companies and gamblers.
“The CPI is the apple of Arthur's eye,” said the leader of the PSB in the Chamber, Felipe Carreras (PE). He was chosen by the President of the House to collect the signatures of the CPI and report on the sector's regulation proposal. “For those who are passionate about football, it is urgent that parliament and public authorities address this issue.”
There is still a third group operating: businessmen who earn money from betting. The sector acts to reduce damages in taxation, avoid a tax collection that it considers excessive and still wants to take advantage of the proposal to resume the agenda of legalizing all gaming verticals in Brazil, including casinos and bingos, the subject of another bill. The lobby to accommodate these interests is in full swing in Brasilia, with meetings at the Planalto Palace, at the Ministry of Finance and in Congress, mainly in the Chamber.
Foreign companies such as Pixbet, Betsson and Bet365 currently sponsor major Brazilian clubs and, according to industry representatives, concentrate resources in tax havens. Recently, foreign companies have opened different associations in Brazil to lobby for regulation. “We think you have to regulate before banning. Prohibition leads to illegal gambling and illegal gambling leads to corruption,” said Wesley Cardia, CEO of the National Association of Games and Lotteries (ANJL).
Last year, the Chamber approved a project that legalizes gambling, opening up the country for bingos, casinos and the jogo do bicho to operate in an open manner. The bill is now in the Senate and is expected to be revived. Defenders say that Brazil is losing revenue from an activity that, even if illegal, already works widely. “All types of gaming verticals must be legalized, all of them, because there is no option in society for not gaming,” said deputy João Carlos Bacelar Batista (PV-BA).
Source: Estadão
