After the sanction of Law 14790 by President Lula, which regulates the fixed-odds sports betting market (known as bets), the Ministry of Finance is expected to create, by the end of January, the secretariat that will monitor the sector. The structure will be responsible for authorizations, overseeing tax collection, and preventing money laundering.
Following negotiations with the Ministry of Management and Innovation in Public Services throughout the second half of last year, the Finance Ministry secured the approval for 38 positions for the secretariat. Initially, the ministry led by Fernando Haddad sought a larger number, between 65 and 80.
The team will consist of public servants (some already in service, to be reassigned, and others to be selected through a competition) and positions of trust, filled by individuals from the private sector.
The creation of the secretariat is expected to be via decree. It will be named the National Secretariat of Games and Bets and will have a permanent nature. The most likely candidate to lead it is lawyer José Francisco Manssur, the current special advisor to the Executive Secretariat of the Ministry of Finance.
In the Ministry of Sports, the hiring of 12 more employees is planned, who will work to combat match-fixing and transfer the revenues obtained from bets to sports entities. Thus, a total of 50 employees are expected, divided between the two ministries.
The operational system that will monitor the sector is nearly ready and already in the testing phase, managed by the Finance Ministry. Last Wednesday (10/1), a meeting was held with representatives of the 134 companies that expressed preliminary interest in operating in the sports betting sector.
In addition to the secretariats, the creation of an integrity agency to monitor bets and lotteries remains on the government's agenda. However, it is expected to be created in a later stage as an evolution of the process, as the creation of a regulatory agency involves a slower process.
Revenue:
The Finance Ministry expects revenue from taxes on online bets to increase collection and achieve the zero fiscal deficit target.
In the 2024 Budget, the revenue projection from bets was conservative at US$ 150 million, but the ministry's estimate has already risen to the billion-dollar range. This projection did not account for online gambling, which was added to the text during the bill's passage through Congress and represents about 65% of companies' revenue — potentially increasing the collection.
The calculation will depend on two revenue moments: the licensing phase and the phase of tax payment by companies. It's worth noting that, for operations in the sector, the law requires a headquarters within national territory.
The initial concession value for betting operations authorization was set at US$ 6 million, to be paid within 30 days. Each concession will be valid for five years and will be granted by the Ministry of Finance.
For betting houses, a 12% tax will be levied on revenue. The rate will apply to the Gross Gaming Revenue (GGR), which is the revenue obtained from games, minus the prizes paid to bettors. Bettors are required to pay 15% of the amount obtained from the prize in this type of bet.
For companies, the second tax moment will depend on the profit calculated based on actual revenue. They will have to pay taxes (Pis/Cofins on revenue or income tax on profit).
Roughly speaking, if most companies that expressed interest in obtaining licenses do so this year, there will be around 100 companies paying US$ 6 million. However, companies can choose to capitalize first and apply for authorization to operate in the future, in other batches.
With the estimated granting of licenses to 100 companies, it was reported that the Finance Ministry expects to raise at least US$ 620,000 this year just with these authorizations. Added to this value is the estimate of taxation on companies. Thus, something like US$ 620,000 in revenue from bets this year is considered "feasible" by the economic team.
Delay and Pressure:
In 2018, Law 13.756 brought the possibility of fixed-odds betting to the legal framework. The Jair Bolsonaro government had a deadline of two years, extendable by another two, to regulate the market but did not do so.
As a result, the rules for operating in this market were not established, and it remained exempt from taxes.
In March 2023, the Public Prosecutor's Office, along with the Federal Court of Accounts (TCU), questioned the Lula government about the deadline for regulating the matter.
"This lack of regulation can cause billion-dollar losses to public coffers," said prosecutor Lucas Furtado in the representation.
The discussion on the topic intensified throughout the year after a series of reports on fraud in football match results. In May, the Parliamentary Commission of Inquiry (CPI) on match-fixing in football matches was established in the Chamber. At the end of the year, after intense negotiations, the government managed to pass the bill in Congress that regulated the sector. At the end of December, the text was sanctioned by President Lula with vetoes.
According to the law, authorization will not be granted to companies with partners or controlling shareholders who have a stake in the Football Anonymous Society or in a professional sports organization. Betting companies linked to professional athletes, members of the technical staff, referees, or officials of a Brazilian sports team will also not be authorized.
There are also prohibitions on games and advertisements involving individuals under 18 years of age, as well as provisions for informative actions to raise awareness among bettors and prevent pathological gambling.
Source: Metrópoles
