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FEATURE
T o get started , how did we get here ? The final hurdle was Bill 3,626 / 2023 being signed into law on 30 December last year , with President Lula da Silva then confirming a new framework to regulate sports betting and igaming .
As the bill underwent its final approval stage , Lula vetoed an income tax exemption for customer earnings below R $ 2,112 (£ 341 /€ 397 /$ 435 ). Five-year licences will be awarded , with companies paying R $ 30m for up to three brands – two fewer than previously expected .
Operators will be taxed at 12 % of gross gaming revenue , with the bulk of the total allocated to sports development . Operators must offer customers self-exclusion windows that range from 24 hours to six weeks . They must also have a Brazilian board member who will hold at least 20 % of the company ’ s share capital .
Companies will also be required to verify the identities of bettors – all of whom are to be over 18 years old – through facial recognition technology .
“ We understand that the proposed measures provide greater security in access to betting and can be an important tool to prevent fraud and , especially in the case of facial recognition , prevent betting by minors , especially children ,” the bill text reads .
THE NEXT STEPS
Brazil is a hugely diverse tapestry of people and cultures . In total , we have a population that is fast closing on a quarter of a billion people . Ed Birkin , senior consultant at H2 Gambling Capital , estimates the value of the offshore market to be $ 2.6bn in 2023 and projects the legal market to reach $ 4.37bn by 2028 . To turn that market potential into a regulated reality , the ministry of finance must now publish regulatory guidelines for operators .
BRAZIL : THE FINAL STEPS TO REGULATION
After a long and winding saga worthy of any legendary telenovela , Brazil has finally entered its era of regulation . The driving force behind the market regulating has been the benefits of taxation – and for a country of more than 200 million people , that could certainly prove very lucrative . Nick Brown analyses a timeline of the next steps , as well as the biggest challenges that remain before the market can go live
In total , more than 130 businesses are reportedly interested in applying for licences . Neil Montgomery , founder and managing partner of Brazilian law firm Montgomery & Associados , explains what we ’ re going to see next . The ministry of finance needs to issue several administrative norms (‘ Portarias ’ in Portuguese ) further regulating the different topics covered by the bill of law . They also need to be put to public consultation before they become effective . It is more likely that Brazil will see a regulated market operating in the second half of 2024 .
This should give sufficient time for operators that have not yet established themselves in Brazil to set up their own structures and select their Brazilian partners which we assume will continue to be a requirement .
“ They will be required to file their applications for a federal licence , with those having submitted their expressions of interest to the ministry of finance under Portaria No 1,330 / 2023 purportedly to benefit from a faster review of their applications .
“ They will also need to satisfy all other legal and regulatory requirements ,
76 • ISSUE 135 • ICE LONDON 2024