The Provisional Measure proposal released on May 11 brings important changes to Law 13,756 of 2018, which legalized sports betting in Brazil. While the previous law attributed the betting service exclusively to the Union, the draft removes this exclusivity, but establishes that only the Ministry of Finance can authorize the operation of the houses in the country. However, the draft does not clarify whether this permission will be granted through a concession or a simple operating authorization.
A positive aspect is that there is no set limit to the number of bookmakers that can operate, which can be favorable to competitiveness and access for bettors. However, the restriction of betting only on sporting events remains in effect, excluding elections, television shows and other common events in the world.
There are two worldwide known ways of collecting taxes on bookmakers: GGR (Gross Gaming Revenue) and turnover. GGR is levied on the result of the volume of bets, minus the payment of prizes, while turnover is levied on the total volume bet. The draft correctly opted for the GGR as a form of collection. In countries that opted for turnover, the market would not develop satisfactorily.
There is a serious mistake regarding the payment of income tax by the gambler, which remains with a rate of 30% on the amount exceeding R$ 2,212. The same taxation of lotteries in general as Mega-Sena, Quina among others was adopted. It turns out that the expectation of winning a lottery is absurdly lower than in sports betting. Taxing bettors in this way could drive them away from the regular betting shops, starting to look for the informal market, bringing as a consequence a problem in the effectiveness of the regular betting system that the government wants to implement.
Regarding the advertising and marketing of bookmakers, the text of the draft was improved, encouraging self-regulation through bodies such as Conar, which is already successful in controlling advertising in general. In addition, the draft includes an obligation to make bettors aware of pathological gambling.
A ban was established on bookmakers acquiring rights to broadcast sporting events, which I consider a mistake, since this source of revenue is important for clubs today.
Restriction of advertising in the national territory only for bookmakers regularly authorized by the Ministry of Finance is a wise measure, as it can effectively direct bettors to regulated houses.
The draft also creates the possibility for the Ministry of Finance to require internet providers to block access by punters to unauthorized venues in Brazil. In addition, the National Monetary Council will be able to prevent payments to unauthorized houses.
With regard to preventing match-fixing, the draft assigns a leading role to sports competition organizations in this regard. However, good international practice demonstrates that the fight against manipulation must be carried out by a joint action by the public authorities, the organizers of sporting events and bookmakers, in a collaborative manner.
Bookmakers will be required to adopt money laundering prevention policies, seeking to prevent these illegal activities from being carried out through betting. This measure is essential to guarantee the integrity and transparency of the sector.
In addition, the draft establishes inspection mechanisms and pecuniary penalties, as well as the possibility of canceling the authorization of bookmakers that do not comply with the regulations defined by the Ministry of Finance. These measures aim to ensure compliance with the rules and promote a safe and reliable gaming environment for bettors.
The draft also correctly prohibits the participation of certain people linked to bookmakers, such as partners and administrators, public agents responsible for regulating betting, minors under 18 years of age and anyone who may have influence on the results of sports competitions, such as athletes, coaches, referees and managers. Agents and attorneys for athletes, as well as directors of sports federations and confederations, are also prohibited. These restrictions are intended to avoid conflicts of interest and protect the integrity of the competitions.
Finally, the draft attributes to the Ministry of Finance the responsibility for authorizing, supervising and regulating fixed-odds betting. This attribution aims to centralize activities related to sports betting in a specific body, which will be able to establish the necessary guidelines and regulations to guarantee the proper operation of the sector.
In summary, the draft of the Provisional Measure brings significant changes to the regulation of sports betting in Brazil. The proposed measures aim to guarantee the transparency, security and integrity of the sector, through the adoption of policies to prevent money laundering, strict inspection, prohibition of participation of individuals with possible conflicts of interest and the centralization of authorization and regulation in the Ministry of Farm. There are good and bad aspects, but the balance is positive.
Luciano Andrade Pinheiro
Partner at Corrêa da Veiga Advogados. Master in Intellectual Property and Technology Transfer from UNB; Graduated in Law from the Federal University of Bahia; President of the OAB/DF Sports Law Commission; Author of legal articles and books. Speaker.
