Brazilian Senate approves sports betting measure

23 November 2018

Sports betting is just one step away from being legalised in Brazil after the upper house of the country’s National Congress approved legislation allowing online and land-based wagering.

The Brazilian Senate has approved Provisional Measure 846/18, which formalises plans for the distribution of revenue raised through the country’s national lottery Loterias Caixa (Lotex), after the measure was approved by a committee in the lower house, the Chamber of Deputies.

As well as formalising lottery distribution plans, the measure also sets a two-year window in which the Congress could formalise regulations for private operators to enter the market and pay tax on their activities.

The author of the measure, Pará Senator Flexa Ribeiro, noted that this would ensure the state could recoup a share of the country’s offshore gambling market, which is estimated to be worth around BRL$4.3bn (£876m/€990m).

While elements such as technical regulations and the number of licences permitted have not been set out, Ribeiro has proposed a tax structure for licensees. His proposal also aims to have the Brazilian Ministry of Finance given ultimate responsibility for regulating the sector.

Land-based operators will be required to pay 80% of amounts wagered back to players as winnings, and will be permitted to keep no more than 14% to cover costs and to be distributed to shareholders as profit.

The final 6% will be divided between a number of social entities, with 2.5% going to the country’s paramilitary National Public Security Force (FNSP), and 2% going to football clubs that allow the lottery to use their branding to promote its games. A further 1% will be awarded to public schools that meet certain targets in national examinations, with the remaining 0.5% going to the country’s social security fund.

Online operators, meanwhile, will be required to pay out 89% of wagers as winnings, and will be allowed to retain 8% of the total. The social security fund will receive 0.25% of profits; schools 0.75%; the FNSP 1% and football clubs 1%.

Having been approved by the Chamber of Deputies earlier this week and passed by the Senate, Provisional Measure 846/18 now passes to President Michel Temer, who has previously said that he would ratify any gambling legislation that reaches his office.