On Wednesday, the Brazilian Chamber of Deputies approved a bill that would regulate legal sports betting and casinos through online platforms.
Brazil has been on the fast path this year to regulate and tax online gambling, and now the South American country is one step closer. Although Brazil passed online fixed-bet legislation in 2018, follow-on provisions for licensing, fees, and taxation stalled.
Brazil’s Minister of Finance Fernando Haddad gets credit for the renewed push toward regulation. Back in March, Haddad announced that he would regulate online gambling.
In July, Brazil’s President Luiz Inácio Lula da Silva issued a provisional decree, giving Congress 120 days to fast track the taxation and regulation of online sports betting sites and online casinos. Now that Brazil’s lower House has approved of the measure, it will go on to the Senate.
Big news for a big market
Brazil is the largest and most populous country in Latin America. It is the fifth-largest country in the world with a population of roughly 215 million people, representing a huge opportunity for regulated online sportsbooks and virtual casinos. It also signifies a huge opportunity for Brazil’s “new” government to generate much needed tax revenue.
Lula da Silva started his second stint — and his third term — as the country’s president in January. To achieve his administration’s economic goals, Lula da Silva needs more financial resources. Although projections vary, the new regulations could generation upwards of R$2 billion (US $407 million) in 2024.
The new regulations would tax net revenues for online gambling companies at a rate of 18%. A three-year license to operate will cost companies R$30 million (US $6 million). Bettors will receive an income tax exemption on prizes of up to R$2,112.
Winnings above that will be taxed at a rate of 30 percent. Proceeds will be divided between Social Security, the Ministry of Education, tourism, sports, and the National Public Security Fund.
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