The growth of the sports betting and online gaming sector in Brazil reached significant numbers in 2023, according to data from the Central Bank. The figures indicate a remittance of R$ 54 billion (US$ 11 billion) from January to November of last year, based on estimates from Folha using recent statistics.
Out of this total, approximately R$ 34.5 billion (US$ 7 billion) returned to the pockets of Brazilians in the form of prizes paid during the same period.
The Central Bank made changes to external sector statistics – which are periodically disclosed – starting in 2023 when the new foreign exchange law came into effect. With the change, the data now provides an approximate idea of the amounts involved in bets on international sites.
As there is a new code for registering these operations, which appear in two specific accounts, it is possible to compare the values of 2023 with remittances from the same period in 2022 and draw conclusions about the activity based on the variation in the flow of funds during the analysis interval.
The Central Bank's data suggests a significant increase in the volume of dollars for activities such as online gaming and betting abroad, implicitly showing that expenses unrelated to the sector (related to other operations with "cultural, personal, and recreational services") remained at the same level, with nominal zero growth.
The numbers reveal not only the exponential growth of the online betting sector but also the substantial economic impact of this phenomenon. The segment gained momentum since 2018 when the offer of sports betting sites was legalized in Brazil. In the 11 months of 2023, remittances from sports betting and online gaming to foreign countries increased more than tenfold compared to the entire year of 2022.
Now, with the regulation of sports betting and online gaming about to be implemented and bets operating according to new regulations, these numbers are expected to grow, and the funds, instead of going to foreign companies, will stay in Brazil.
Law 14,790, signed by President Lula on December 30, regulating sports betting in Brazil, awaits veto analysis by the National Congress. It provides for a 12% taxation on the GGR for betting houses and a 15% income tax on the winnings of bettors.
Considering the numbers indicated by the Central Bank, betting houses would be subject to a tax of around R$ 2.4 billion (US$ 500,000), while bettors would have to pay around R$ 5.1 billion (US$ 1 billion). The law also provides for the payment of a grant fee of R$ 30 million (US$ 6 million), valid for five years for up to three brands per operator, which would amount to around R$ 4 billion (US$ 800,000) if the 134 companies that expressed interest effectively apply for a license. Hence, the government's urgency in starting the implementation process of the regulated Brazilian market.
Law 14,790 also determines rules regarding advertising, responsible gaming, and the requirement for payment method companies to be authorized by the Central Bank. Payments with credit cards will not be allowed to prevent the risk of indebtedness. The law will also require effective player identification measures, including the use of facial recognition tools.
Source: GMB
