In a public hearing at the Sports Committee of the Chamber of Deputies, the special advisor to the Ministry of Finance José Francisco Manssur, responsible for carrying out the work to regulate sports betting, provided important information about the activity.
The most important one, which still needs more details, is the taxation of the sector. According to him, in conversations with the rapporteur of the bill currently being processed in the Chamber of Deputies, Adolfo Viana, they “reached a very important flexibility in the tax, something that will make the market accessible.”
He added that the sector needs to contribute to the collection and very soon everything will be presented by the rapporteur. Manssur did not say, however, to what level the taxation will be reduced.
After a quick explanation of how the entire process was conducted, he lamented the lack of initiative from the previous government: “We failed to raise a few billion of reales, which could have been applied to health, education, basic sanitation and city infrastructure due to the lack of regulation.”
Furthermore, Manssur highlighted that the lack of regulation of sports betting to date leaves the government without legal instruments to act in the fight against match-fixing and money laundering, as well as to act in the treatment of gambling disorder.
Judicialization
Lawyer Udo Seckelmann, from the National Academy of Sports Law (ANDD), highlighted the creation of “an exclusionary regulatory environment”, in which state lotteries are already granting accreditation for companies to operate throughout Brazil. He cited the example of Rio de Janeiro, where the cost of the grant is R$5 million (US$ 1m), with 5% taxation on the GGR, which means that numerous operators are interested in local licenses for national operations.
Manssur was categorical: “The federal government is very concerned about the issue of state lotteries and I do not advise betting houses to have the understanding that they can apply for a local license to operate throughout Brazil.” According to him, “the government will not allow that’s why we are already reacting and will take the issue to court,” he stated.
New ordinances
The advisor to the Ministry of Finance also stated that new ordinances will be launched soon to continue the sector's regulation process, including one in partnership with the Central Bank, so that payment method companies go through a certification process so that can offer their services.
Furthermore, “we will have an ordinance to deal with how sports betting will be taxed. The taxation rules are already in the Provisional Measure which is being debated in the National Congress. We are open to discussing possible adjustments with Parliament, which even the operators are requesting.”
According to Manssur, a new ordinance is about to be issued that will define the deadline for receiving the grant, adding that it will only occur from 2024. “At this moment, we are going to issue a new ordinance asking companies to make a statement of interest, without paying anything at the moment, but within a period to be defined. This way, we will have a metric of the size of the sector and the possibilities of revenue from the activity.”
He recalled that to collect taxes, additional obligations need to be created. “There will be a specific ordinance on this, as well as another for the authorization criteria. They will have to be objective. We will create a system at the Ministry of Finance for the operator to apply to operate in Brazil through software. There's no need for conversation. Just present the required documents and pay the grant fee,” he said.
Games of chance are left out
Once again Manssur stated that the work carried out at the Ministry of Finance only involved the regulation of sports betting, “even because we are complying with Law 13,756/2018”.
According to him, the other games of chance are being debated in the Senate, through Bill 442/1991, and “the Executive will respect the decision to be taken by Congress. These games are not included in the regulations we are working on.”
Estimated revenue
Regarding the government's revenue estimate from the regulation of sports betting, Manssur said that his department works with market data and even that provided by operators. “It must have moved between R$100 (US$ 20bn) and R$150 billion (US$ 30bn) last year. But we cannot rely on this information. With the market regulated, we will be able to make all estimates.”
For the 2024 budget, in a responsible manner in the words of the special advisor, it is estimated a collection, between grants and taxes, of R$2 billion (403m) was estimated. “In the future, it could grow up to R$12 billion (US$ 2.4bn), not next year but over the course of the sector’s maturation.”
In this regard, Udo Seckelmann recalled “a lot of caution is needed, considering that bookmakers currently also offer other gaming verticals.”
Source: GMB
