The intention of the measure is to ensure that the user can only direct money for bets that is already in their bank account. By vetoing the use of credit cards in the betting market, the government seeks to prevent this activity from driving the over indebtedness of the Brazilian population and the addiction of bettors.
The restriction on the use of bank slips for bets and online games is a preventive measure against money laundering—considering that this payment method is often linked to this type of crime.
The discussion is part of the negotiations led by the Ministry of Finance, together with the Federal Revenue and representatives of companies in the sector, to establish the parameters that will guide the operation of the sports betting market.
The next step will be to consult the PGFN (Attorney General's Office for National Treasury) about the legal viability of the measure. After that, the idea still needs to be approved by Minister Fernando Haddad (Finance).
The bill regulating sports betting was approved by Congress at the end of last year. On December 30, in an extra edition of the Official Gazette of the Union, Lula sanctioned the text, with some vetoes.
The main provision overturned determined that bettors would be exempt from paying taxes on winnings from games and bets below US$ 408.
According to the president's dispatch, keeping this section "would give rise to an income tax different from that verified in other lottery modalities, thus causing a distinction in tax conduct without motivating reason for such."
The Executive's veto will still be evaluated by Congress and can be overturned. Industry members view Lula's decision with concern, as they understand that the lack of exemption may not only drive away users but also encourage them to migrate to clandestine and illegal markets.
After the law's approval, the federal government is working to issue a series of ordinances that will define more specific aspects of the betting market.
There are still doubts about how the sector will be supervised, as well as what the requirements and procedures will be to authorize a company to operate in Brazil.
The law outlines basic guidelines and brings some criteria for the commercial exploitation of this market in the country, such as the constitution of a company headquartered in Brazil, minimum share capital for companies, implementation of a call center in Brazilian territory for customer service to bettors, corporate structure, and the payment of aUS$ 6.2 million grant valid for up to 5 years.
It is now up to the government, through regulation, to provide detailed information on the requirements outlined in the law.
The new legislation provides for a 12% tax rate on the revenue of betting houses (minus prize payments). Bettors will have to pay 15% of the amount obtained with the prize.
Lula also sanctioned the provision authorizing, in addition to sports betting, that websites host online casinos. This section caused controversy during the text's processing in Congress and was overturned by the Senate but later reinstated in the law by the Chamber.
According to market estimates, from 60% to 80% of the money moved by the fixed-rate betting sector comes precisely from online games, a category to which these casinos belong.
Because of this, the government and the sector saw the measure as important to ensure attractiveness. Critics, however, argue that it could increase the risks of user overindebtedness and player addiction.
In a preliminary call, opened even before the law was approved, the Ministry of Finance received more than 130 expressions of interest from companies interested in operating in the Brazilian betting market.
The amount was recorded at a time when online casinos were included in the text being processed. From this, the government estimates that it could raise about R$ 620 million solely in grants.
Source: Folha
