Chamber of Deputies overwhelmingly backs Bill PL 3,626/2023, as President Lula set to give his approval to regulate the market
Brazilian politicians have given the green light to regulated sports betting and online games of chance in a move that will usher in one of the largest legal online gambling markets in the world.
Yesterday, 21 December, the Chamber of Deputies approved Bill PL 3,626/2023, with 307 votes in favour, 115 against and one abstention.
The framework will now be sent to President Luiz Inácio Lula da Silva for his final approval.
Lula has 15 days to approve the Bill, something his predecessor Jair Bolsonaro failed to sanction before he departed office last year.
In a major victory for to-be licensed operators, the lower house retconned the Senate’s previous decision to remove igaming from the Bill.
Concerns had been raised by Senators over the proliferation of igaming, which ultimately saw it removed.
However, the Chamber of Deputies added the vertical back into the Bill, with member of the lower house voting 261 to 120 in favour of regulated games of chance.
The Brazilian Institute for Responsible Gaming (IBJR), an operator lobby group, had claimed at least 70% of the market could land in the hands of offshore operators should igaming not be regulated.
During the plenary debate yesterday, the rapporteur of the bill, Adolfo Viana, was bullish in his defence of including igaming.
He said: “We want a law that, definitively, establishes that these betting sites will be supervised and taxed by the country. If we do not approve the project, the games will continue to take place without supervision.”
Elsewhere, the Chamber of Deputies retained the 12% GGR tax rate, while operators will have to pay BRL30m (£4.8m) for a five-year licence which will allow them to launch three brands in the market.
The 12% tax rate will be divided among public spending for education, safety, sports and tourism.
However, in what may prove a difficult hurdle, operators must have a headquarters in Brazil, while a Brazilian individual must sit on a licensed firm’s board and hold “20% of the share capital”.
Bettors will also be subject to a highly controversial 15% tax on winnings above BRL2,112 each year, a measure that has raised concerns over further black-market leakage.
Advertising will be allowed, although all marketing must carry gambling-related harm warnings, while any material that suggests gambling as “socially attractive” will be prohibited.
Additionally, the regulation will prevent under-18s, people diagnosed with gambling disorders and those involved in Brazilian sport from betting with licensed firms.
Reacting to the news, KTO Group CEO Andreas Bardun said: “KTO is excited to announce that the long-awaited regulation of the Brazilian market for online sportsbooks and casinos has been successfully implemented.
“This milestone reflects a well-executed regulatory framework that effectively addresses key concerns within the industry. We are extremely pleased with the outcome and commend the authorities for their diligent efforts in achieving this.
“Our commitment to the Brazilian market is unwavering, and we enthusiastically welcome the new licensing structure.
“KTO is poised to make substantial investments in Brazil, an initiative we believe will contribute significantly to the creation of new employment opportunities and the generation of substantial tax revenues for the country,” he added.