Brazil’s President, Luiz Inacio Lula da Silva, has officially approved the regulation of sports betting and igaming in Brazil by ratifying a new regulatory framework. Bill 3,626/2023 was signed into law on December 30, following the endorsement of the bill by Brazil’s chamber of deputies on December 21. This approval came after igaming was added back into the bill, having been previously removed by the senate.
President Lula also made the decision to veto a proposed income tax exemption for customer earnings of under R$2,112, with personal net winnings being taxed at 15%. Operators will be taxed at 12% of gross gaming revenue, with the majority of the total allocated to sports development as per the recommendations of the Economic Affairs Commission.
Under the new law, fixed odds bets will be allowed with the Ministry of Finance responsible for regulating operators. Additionally, five-year licenses will be awarded to companies, with the requirement of a Brazilian board member holding at least 20% of the company’s share capital. The companies must also offer self-exclusion windows for customers and verify the identities of bettors using facial recognition technology.
The Ministry of Finance will publish regulatory guidelines for operators, with over 130 businesses reportedly interested in applying for licenses. Inclusion of igaming in the bill came after it was initially removed by the senate, but the Chamber of Deputies retained the authority to overturn that decision, utilizing its power to do so.
Neil Montgomery, founder of Montgomery & Associados, and Hugo Baungartner, vice president of Aposta Ganha, both believe that the financial benefits of igaming made its inclusion in the bill inevitable, despite opposition. Baungartner stated, “The government knew that igaming was crucial for their 2024 budget. I could say that was a master play from them. They [opponents to igaming’s inclusion] always existed and will exist. However, they have to understand that the gambling business is a reality in Brazil.”