The enactment of Law No. 14,790, on September 11, 2023, marks a crucial milestone for the sports betting market in Brazil. Since Law No. 13,756/2018 legalized fixed-odds betting, the sector has experienced remarkable growth, with the entry of numerous companies, popularly known as "bets." These online platforms allow users to place bets on sporting events, ranging from soccer to less popular sports, with fixed odds set by the companies themselves.
Despite the rapid growth, the sector lacked detailed regulation and effective control to prevent it from being used for illicit activities, such as money laundering.
The new legislation, enacted by the federal government, aims to fill these gaps by establishing strict criteria for the operation of betting platforms and imposing a set of rules aimed at oversight. This text will analyze how this regulation addresses the challenges posed by this growing market.
Law No. 14,790/2023 essentially complements Law No. 13,756/2018, which initially legalized fixed-odds sports betting in Brazil. While the 2018 legislation allowed the sector to operate, the new law provides more detailed regulations, addressing the fiscal and operational obligations of the companies involved.
Starting in 2025, betting companies, or ‘Bets’ as they are called in Brazil, will need to obtain licenses issued by the Ministry of Finance, which can cost up to R$ 30 million and will be valid for five years.
Additionally, the law provides for taxation on betting profits, establishing a 15% Income Tax on bettors’ net winnings. Part of the revenue collected will be allocated to public interest areas, such as social security, education, sports, tourism, and public safety.
The new legislation also introduced important control mechanisms. Betting companies must be auditable, ensuring that the Ministry of Finance has access to systems that allow continuous monitoring. This aims to ensure transparency in operations, making it harder for these platforms to be used for money laundering. Any unusual financial activity by bettors must be monitored and reported.
Unlike other countries that accept cryptocurrencies, in Brazil, betting payments must be made exclusively through formal means, such as bank transfers, boletos, and PIX, thus facilitating transaction oversight. Furthermore, the law prohibits the anonymous payment of prizes or through institutions not under the supervision of the Central Bank.
‘Bets’ should not be seen as "illicit businesses," but rather as agents that can contribute to the creation of a regulated and safe market. The new legislation actually seeks to legitimize their operation under clear and strict rules. Companies wishing to operate in Brazil will have to adopt effective measures to prevent fraud and manipulation, as well as strictly comply with all legal requirements to ensure the integrity of their activities.
The expectation is that, after the adjustments required by December 31, 2024, the market will be fully operational by 2025, creating a safer business environment for both bettors and companies.
Despite the progress, combating money laundering in the betting sector faces significant challenges. The international nature of betting companies demands continuous cooperation between Brazil and other countries to prevent illicit activities from being facilitated by companies operating in multiple jurisdictions. This collaboration is essential to prevent the insertion of illicit funds into the Brazilian financial system through betting.
It is estimated that the betting market in Brazil, driven by the popular ‘Bets,’ could become a major source of revenue for the government, with projections of billions of reais in tax revenue.
However, for the sector to operate responsibly, it will be essential to maintain strict control over betting platform operations, ensuring that these companies contribute to economic development without opening loopholes for illicit activities.
Law No. 14,790/2023 represents a significant step forward in the regulation of sports betting in Brazil. It not only establishes a legal framework that ensures the legality of operations but also implements robust control and oversight mechanisms, essential for preventing the use of these platforms for money laundering practices.
The betting sector, popularly driven by the ‘Bets,’ has the potential to become an important source of revenue and development, but the success of this initiative will depend on the government’s ability to rigorously monitor activities and the companies’ collaboration to maintain a safe and transparent business environment.
Livelton Lopes
Master in Economic Criminal Law from the Brazilian Institute of Education, Research and Development – IDP, postgraduate in Procedural Law and active in the areas of Economic Criminal Law (money laundering, compliance, tax crimes and corporate crimes), Crimes Against Public Administration, Business, Civil and Electoral Law.
