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The fallout continues from the news that Brazilian President President Jair Bolsonaro and his evangelical support bloc will stand against approving both broader gambling legislation and sports-betting regulation before the election in October.
Bolsonaro-appointed Senate leader Carlos Portinho came out in support of his President, to little surprise, confirming that no moves will be made before October.
Meanwhile, gambling companies are already calculating how much tax revenue the Brazilian government stands to lose as a result.
Portinho, a former sports lawyer, gave an interview to Brazilian outlet Economico Valor in which he stated: “It is difficult to carry out a tax reform in the last year of the government, as well as to advance in the customs agenda. There are games, weapons, homeschooling.”
The games he refers to means gambling, which is still technically illegal in Brazil, although sports-betting legislation was passed in 2018 and just awaits an enabling decree to be signed by the President. The customs agenda includes legalising gambling.
“This is all easier with the renewal of President Bolsonaro’s term. The same is true of administrative reform or privatisation. It will be easier with the beginning of a new government, with legitimacy revalidated by the vote.”
Bolsonaro faces a tough re-election battle against former President Luiz Inácio Lula da Silva, who has bested him in some polls.
Portinho reiterated that Congress has three working weeks — the last week of June and two weeks in July — before the new term with a new President in November. “We cannot miss the few working weeks we will have on agendas that will not advance.”
Brazilian outlet BNLData has estimated how much money the Brazilian government is set to lose in taxes by delaying regulation of the sports-betting market.
Together with André Gelfi, a partner at Betsson in Brazil, they estimated that the country is losing out on BRL6.4bn ($1.27bn) in taxes.
According to the figures, granting licences is worth up to BRL2.2bn ($440m) and income tax on winnings is worth BRL3.4bn ($670m). A further BRL800m ($158m) could come from corporate taxes.
Gelfi wrote in Exame on Wednesday (June 15) that the unregulated sports-betting industry in Brazil is “a billionaire”, legal or not.
“[It] already moves around R$160m daily in the country, without any control or taxation.
“Today, there are hundreds of brands offering sports betting and online casino games freely, without being accountable to society. With the regulation, the government would assume its responsibility: to protect, inspect and tax.”
Brazil has two betting bills under consideration, the first is general legislation that would legalise gambling, which has been in the works since 1992 via Bill 442.
The second is the sports-betting law, Law 13,756, which was passed under Michel Temer’s government, but needs to be implemented. At the time it was passed, the law stipulated a deadline of four years for the aforementioned implementation, which will be up in December.
Neither one is poised to advance before the election.
Lawyer Luiz Felipe Maia explained: “Right now, President Bolsonaro is much more concerned about winning the election than with any potential tax revenue loss. Unfortunately, I don't think this argument will impact the decision.”
