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Brazil’s long-awaited provisional measure to implement a sports betting market is expected to be followed by multiple decrees on specific areas of regulation, according to a legal expert in the country.
Udo Seckelmann, a gambling and sports lawyer at Bichara & Motta, told VIXIO GamblingCompliance that the presidential emergency decree or provisional measure should be published soon, and predicts it will emerge before the end of March.
After that measure is approved by Brazil's Congress and becomes law, the government of President Luiz Inácio Lula da Silva should then issue a series of further regulatory decrees.
Instead of a single overarching document to regulate the market, there would be one decree to address each of various issues, for example, one to prevent money laundering, one for match-fixing and one for taxation, said Seckelmann.
On the taxation front, it is understood that some sports-betting stakeholders are becoming anxious that Lula’s Ministry of Finance intends to change the fiscal terms that were included in the 2021 amendments to the national law on fixed-odds sports betting that former President Michel Temer signed back in 2018.
That law stipulates that operators would pay a monthly regulatory fee and that players would pay income tax on winnings in excess of US$500, which is the same limit as other legal lottery games. Operators would also be subject to a combination of turnover- and revenue-based taxes.
Seckelmann cited the example of France’s oppressively high tax rates for sports betting as established by a law of 2010, which saw half of licensed operators leave the country.
Why the multiple decrees for sports betting?
“It would be hard to change everything again,” if regulations enshrined in a provisional measure subject to approval by Congress had to be revisited, Seckelmann said.
“So I think they want to set a base, and then after that, another base and then the other base. If something's wrong with the previous one, they can change something. I think that's the rationale behind it,” said Seckelmann.
That might not be the ideal approach to regulation, Seckelmann added, “but to be honest we are just hopeful that we're going to regulate the market.”
