Brazil Senate Greenlights Sports Betting Legislation, Rejects Online Gambling

Posted on: December 13, 2023, 05:12h. 

Last updated on: December 13, 2023, 11:39h.

In a significant move, the Brazil Senate has finally approved a pivotal bill that could pave the way for the establishment of a regulated sports betting market in the country. While this marks a positive step forward, the approval comes with a caveat, as the Senate opted against endorsing provisions related to online gambling.

Brazilian senators celebrate during a session vote earlier this year
Brazilian senators celebrate during a session vote earlier this year. The chamber has approved a sports betting bill, but omitted online casinos. (Image: Reuters)

The Chamber of Deputies approved the bill in September, and the Senate has been working on it periodically since then. The Senate’s updated version of the legislation will now go back to the Chamber of Deputies for another review.

Most of the language, amendments, and transformations included by the Senate survived Tuesday’s vote. However, they also now have to survive the return trip to the Chamber of Deputies.

What’s Included

For companies seeking to operate in this burgeoning field, a specific license for online or physical betting, or a combination of both, will be necessary. The Ministry of Finance will be in charge of issuing the licenses, which are valid for five years and could cost up to BRL30 million (US$6 million).

To qualify for a license, companies must meet certain criteria, including maintaining their headquarters and administration within Brazil. They also must adhere to technical and cybersecurity standards, appoint a member with expertise in the field, and implement internal control measures for customer service.

Notably, the reduction in the tax on companies’ revenue survived. Instead of paying 18% as some lawmakers wanted, sports betting operators will pay 12%, according to the approved text.

Concerning the taxation of bettors’ winnings, the proposed reduction from 30% to 15% has financial implications for the federal government. It initially anticipated revenue ranging from BRL2 billion to BRL6 billion (US$402,600 to $1.2 million) in 2024, but may now have to accept around half that amount.

There are also strict guidelines for advertising that prevent gaming operators from disseminating misleading information to bettors about the likelihood of winning. Additionally, operators cannot portray betting as socially attractive, including the use of celebrities who suggest that participation contributes to personal and professional success.

Among the stipulations, gaming operators are required to establish a customer service channel, either by telephone or the internet. This must be free of charge and is designed to address and resolve queries and requests related to betting.

What’s Not Included

The bill’s legislative journey faced delays as senators grappled with the inclusion of virtual casinos in the proposal. Although online casinos are currently prohibited in Brazil, their operation persists because of the foreign headquarters of the companies involved. Users can easily create accounts on these platforms and declare they’re of legal age to access games like slots, roulette, blackjack, and poker.

Recent investigations into groups promoting and selling the game Fortune Tiger, known as Jogo do Tigre in Brazil, have further fueled discussions among parliamentarians. The slot-like game, apart from being illegal, has come under fire amid reports that numerous players have wiped out their life savings trying to win big prizes.

As a result, some senators advocated for the removal of online gambling from the bill in response to the concerns raised by these investigations. They won the battle and, for now, regulated iGaming still isn’t welcome in Brazil.

It’s not dead, however. Senator Carlos Portinho, who was behind the move to drop iGaming, suggested it could return as a standalone bill.