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The central figure in Brazil’s sports-betting legislation has confirmed that he is pursuing a lower tax rate for operators, as well as the possible inclusion of online casino games in a bill set to be voted on by the Chamber of Deputies early next week.
The tax rate due to be proposed in Deputy Adolfo Viana's report on sports-betting bill PL 3626/23 will reportedly land somewhere between 8 percent (as advocated by operators) and the current 18 percent of gross gaming revenue (GGR). That percentage does not include the local taxes that will bring the total to around 20 to 30 percent, depending on the headline rate.
A rumoured compromise due to be put forward by Viana will be somewhere between 12 and 14 percent of GGR.
As the designated rapporteur of the sports-betting bill, Viana has considerable power to redraft legislation that was first proposed by Brazil's federal government in July and either include or reject further amendments put forward by other federal deputies.
Viana told Brazilian media that he is endorsing a progressive tax rate that will increase as the years go on in order to make the market more attractive and inclusive to operators as it launches.
He said that he shared the operators’ concerns that the black market would thrive if the barrier to entry was too high. Those concerns were voiced by industry representatives earlier this month.
Viana said that those fears also mean that renegotiating an anticipated R$30m upfront licensing fee is still on the table. That figure has not actually been established through any proposed legislation to date, but Viana suggested it could be baked into the statute rather than left to government ministries to determine later.
Thursday marks Brazil’s Independence Day, but local sources expect that Viana's eagerly anticipated version of the bill to belatedly implement an original 2018 sports-betting law will be made public and voted on Monday when the Chamber of Deputies returns to work.
By then, the bill will formally block the Chamber's legislative agenda until it is voted on, as it has an urgency clause attached to it, and the 45 days the lower house of Congress has to do so expire on Friday (September 8).
Viana's report on the bill is set to include various elements lifted directly from a "provisional measure" emergency decree for sports betting, which will be left to expire in favour of the bill.
Meanwhile, Viana and other senior congressional figures have indicated that the bill may also include text that will legalize online casino games, in an effort to regulate all forms of online gambling at once, but will leave out any similar proposals for land-based gaming operations.
Arthur Lira, the president of the Chamber of Deputies, told reporters on Tuesday that the bill currently "only deals with online sports betting, when we all know that the bulk of these online bets are on games of chance such as online casinos and so on".
“So the bill should cover the entire circumstance of everything that is done online in the face of Brazilian legislation, the payment of taxes, the creation of jobs with no regulation,” Lira said.
Viana has reportedly been meeting with the evangelical bloc in the Chamber of Deputies this week to negotiate a way forward for sports-betting legislation. Evangelicals in Congress are known to be staunch opponents of legalizing gambling as a whole, but have proved somewhat more amenable to sports betting, a national pastime.
The Chamber of Deputies narrowly passed a bill in early 2022 to legalize online casino games alongside dozens of land-based casino-resorts, jogo do bicho numbers games and potentially hundreds of bingo halls equipped with video-bingo devices.
It remains to be seen how proponents of those other forms of gambling would respond in the event of online casino, and only online casino, being attached to sports-betting legislation.
Luiz Felipe Maia, a Brazilian gaming law expert, explained that attaching online casino games to sports-betting legislation also has its opponents outside evangelicals.
“Some people think it may weaken the negotiation of PL 442,” Maia said, referring to the bill that would legalise all gambling which is currently pending in a Senate committee.
Rafael Marchetti Marcondes, the legal director of local fantasy-sports operator Rei do Pitaco, said that “including online casinos in the bill would be a way to solve a future problem that Brazil may face — how to avoid that licensed companies in Brazil can explore sports betting and not casinos, when currently, they offer both”.
“Companies would have websites dot.com.br and dot.com operating at the same time? Different brands? This is an issue that is not easy to solve. Including in the bill online casinos solves that,” Marchetti told Vixio GamblingCompliance.
Lira would also benefit, Marchetti said, because online casino games would significantly boost government income, particularly for the Ministry of Sport.
Additional reporting by James Kilsby.
