The law that is currently being prepared in Brazil for sports betting does not exclude companies based outside of the country.
Brazil.- The draft law for sports betting is not yet defined in Brazil, but the government has revealed an important detail. As reported by the government, betting sites that operate from outside of the country will not be blocked.
Alezandre Manoel Angelo da Silva, national secretary of Public Policy Evaluation, Planning, Energy and Lottery of the Ministry of Economy, explained that this measure is aimed to bring companies to a legal framework. “When the market is regulated, these type of sites have to operate legally in Brazil. If not, it will be punishable,” he said.
On the other hand, VP of the Special Commission on Sports, Lottery and Entertainment Law of the Federal Council of the Brazilian Bar Association, Pedro Trengrouse, said that the concept of “blocking” is important to prioritise licences to trusted operators that respect the law. And not to allow illegal operators to benefit from building a customer base and offering illegal bets,” he argued.
Sports betting rules
During a public consultation held in August, 1,849 suggestions were submitted in 30 days. The suggestions were used to establish the guidelines that will be followed regarding authorisation, taxes and penalisation of those who do not comply.
Another important decision was to establish the authorisation regime for companies to work within the segment. Only those who follow approved legislation may operate.
To operate in Brazil, companies must pay a single fee worth €660k. This licence is valid for nine years. After the deadline, the operator must pay again an updated amount. As they explained, this is a mix between the United States and Italy model.
To put an end to illegal businesses, the government will set the tax rate at 1% of income. The market demanded that the gross income of the game (GGR) calculates the tax regime. Taxing 1% of income is equivalent to 5% and 7% on GGR and contemplates the proposal of the private sector, according to the Ministry of Economy. This model is the same regime as Italy or England, already developed markets.
The federal government intends to amend the Criminal Code to impose severe penalties on illegal operators. Those responsible for illegal websites may spend up to five years in jail and face fines. Those who participate in match-fixing can also face up eight years in jail and a fine. However, the approval of Congress must approve such changes first.