Brazilian Senators Propose A New Sports-Betting Law

March 14, 2023
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The sudden frenzy around sports-betting regulations in Brazil has seen two senators proposing a new bill despite the fact that a presidential decree to regulate an existing sports-betting law appears imminent.

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The sudden frenzy around sports-betting regulations in Brazil has seen two senators proposing a new bill despite the fact that a presidential decree to regulate an existing sports-betting law appears imminent.

Bill PL 845/2023, introduced last week by Senators Jorge Kajuru and Hamilton Mourão, would require sports-betting companies to be based onshore, establish a licensing fee of approximately US$4m and would impose certain restrictions on advertising to ensure responsible gaming.

Taken out of context, the proposed legislation sounds par for the course, but Brazil already has passed a sports-betting bill, with the country seemingly in the final phases of implementing legislation that was enacted in Congress more than four years ago.

The senators' proposed legislation largely is similar to a leaked draft regulatory decree of 2022, which suggested an upfront licensing fee of R$22.2m (approx. US$4.4m).

At the weekend, leading news magazine Veja reported that finance minister Fernando Haddad was now preparing an implementing decree that will include an asking price for a five-year sports-betting licence of R$30m (just over US$5.7m). Bettors are also likely to face a 10 to 20 percent tax on their winnings, according to Veja.

Kajuru and Mourão’s bill does not appear to have any real chance of progress, as it is in fact unconstitutional. According to Item IV of Article 84 of the Brazilian constitution, it is the responsibility of the President alone to issue regulations to implement laws passed by Congress. This bill, by addressing the regulation of sports betting, interferes with that exclusive responsibility.

The question remains why the senators would continue with such a bill, knowing it was dead on arrival.

According to Luiz Felipe Maia, a sports and gambling lawyer at Maia Yoshiyasu in São Paulo: “They are bringing attention to the urgency of regulation. They are also bringing attention to themselves.”

Of greater concern than the Senate proposal is the reported R$30m asking price for a sports-betting licence, which may discourage grey market operators from applying.

“If you compare the fee to other jurisdictions, it's extremely high,” said Maia. “They need to make a choice whether they want to have a large number of operators and try to bring most of them to the white market, or if they would rather have fewer operators and have to deal with a very large black market.”

It may be hard for the Ministry of Finance to charge less now that the R$30m figure has been highlighted in the press, but many believe that bringing Brazil's flourishing grey market into the regulatory fold is going to be difficult as it is.

Maia concluded: “They are going to make less if they charge more.”

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