New Year, Same Wait For Brazil's Sports-Betting Regulation

January 11, 2023
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Recent changes to Brazil's tax codes and comments from an outgoing senior official would suggest that regulations for sports betting are imminent, but legal experts are advising caution as a new presidential administration takes office.

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Recent changes to Brazil's tax codes and comments from an outgoing senior official would suggest that regulations for sports betting are imminent, but legal experts are advising caution as a new presidential administration takes office.

This week, eagle-eyed Brazil watchers will have noticed a change in the Brazilian tax revenue codes that allocates funds from lottery games. Namely, new codes that have been created to govern sports betting.

The catch? Sports betting, despite the hopes of many operators, lawyers and lawmakers, has yet to be regulated despite a law being on the books for more than four years.

Others may have noticed Brazil's outgoing undersecretary of lotteries and sports betting, Iuri Castro, posting a goodbye note on LinkedIn on January 8, in which he declared that the infrastructure for sports betting, including a regulatory ordinance, is ready and only awaits a signed presidential decree.

These breadcrumbs all lead to the same hope: that sports-betting regulation is nigh.

A federal law to regulate sports betting was signed in December 2018 by then-President Michel Temer in the last weeks of his presidency. At the time, the government was given a two-year window for a presidential decree to be signed to regulate the law — as is procedure — with the possibility of a two-year extension. That four-year window came to a close on December 12, 2022 with no action.

Seasoned observers agreed that the final two months of 2022 held the best chance for signing the decree, as former President Jair Bolsonaro had lost the election and backing a pro-gambling measure was no longer a political risk in terms of his conservative base.

What observers both domestic and international did not anticipate, however, was Bolsonaro’s reaction to losing the election: all but disappearing from view during the final few weeks of his presidency.

Bolsonaro spent a fair amount of time in and out of hospital, allegedly related to complications from a stab wound he received years ago, although no one would confirm what ailed him while he was still in office.

Now that Luiz Inácio Lula da Silva has been inaugurated as Brazil's President for a second time, sports-betting stakeholders are hopeful once again that betting will finally be regulated.

“What is happening now in Brazil is everything is conspiring to have a regulated market,” said Udo Seckelmann, a sports and gambling lawyer at Bichara Motta law firm.

The economy ministry's departing head honcho Castro also was convinced he left Lula’s transition team with easy work to bring sports-betting regulation to life.

He wrote: “I leave with my head held high, especially in relation to sports betting, because as promised in June ... after a lot of hard work and extreme dedication (exhausting days, weekends, holidays and vacations included) today we have a draft of an ordinance (complete and complex) structured, addressing all the necessary topics (following the best practices) for its regulation, awaiting the publication of the Presidential Decree.”

Seckelmann urged caution, however.

“I think that command in the Ministry of Economy has changed at least four or five times since 2018,” he said. “So it’s not a novelty really here. In the case of Castro it was expected, so let’s see who is going to assume the position and what their position is in regards to regulations.”

Meanwhile, the General Coordination of Collection and Credit Rights (Codar), a federal revenue agency, on January 5 established lottery revenue codes in the official gazette, including Code 9197 “for the contribution on lottery income from fixed-quota bets”, in other words, sports bets.

“Everybody is looking to organise everything in order to have a regulated market. But it isn’t clear if this means that we are going to have a regulated market,” said Seckelmann of the move by Codar.

“We don’t know the positions of Lula about this, or if he’s going to use what was done by the Ministry of Economy in the past four years for the regulation of sports betting.”

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