Brazil’s senate votes to approve sports betting – igaming removed

By Nick Brown

Brazil's senate plenary voted yesterday (12 December) to approve the amendments to Bill 3,626/2023, which will regulate sports betting. However, igaming was removed from the bill.

Originally scheduled for 6 December, the vote was delayed due to a lack of available senators to vote.

The bill was presented by Senator Angelo Coronel to the senate yesterday evening. It contained the latest round of amendments following initial approval of the bill three weeks ago by Brazil’s Economic Affairs’ Commission.

While the bill faced significant opposition, three key highlights were focused on in yesterday’s voting session.

The first, and most notable, is that the senate voted to remove igaming from the bill. The amendment was presented by Senator Carlos Portinho, with 37 votes in favour of excluding igaming and 27 against.

In addition to the exclusion of igaming, the senate also voted to exclude virtual games and sports betting terminals. An amendment that would prohibit sports betting advertising in stadiums was also turned down.

All taxation recommendations introduced by the Economic Affairs Commission on 22 November were also approved.

This confirms that GGR (gross gaming revenue) will be limited to 12%, instead of 18%. The taxation on winnings has also been modified.

Bettors will be taxed only once a year, at a rate of 15% on net winnings. This exceeds the exemption threshold of BRL2,112 (£339/€394/$425).

Licensees will also be required to pay an initial fee of up to BRL30m. By doing so, they will be granted the right to operate up to five different brands.

What happens next for Brazil’s regulation?

Now that the bill has been approved in the senate, it will return to the chamber of deputies.

While the bill was previously approved by the chamber of deputies in September, the chamber will now need to vote again to agree on the changes made to the bill by the senate.

The challenge now will be for the chamber of deputies to vote on the amendments to the bill ahead of the Christmas recess. This begins on 23 December and continues until early February 2024.

As a result, we effectively have a further 10 days for the vote to take place.

Is igaming now off the table?

While the senate voted to remove igaming from the bill yesterday, the chamber of deputies retain the authority to overturn the exclusion. This means that we will potentially see igaming re-introduced to the bill.

With the exclusion of online gambling, it is already likely that projected taxation revenue will fall short of what was originally expected.

With an initial target of BRL1.6bn, it is now expected to reach less than half of that amount. This is estimated at BRL700m. That total is in glaring contrast to what was initially hoped for via taxes and licence fees.

In an interview with iGB last week, Neil Montgomery, founder and managing partner of Brazilian law firm Montgomery & Associados, expected opposition to igaming from the senate.

The subject of igaming will likely be the most contentious point in next week’s chamber of deputies vote. Given that the chamber of deputies retains the authority to reintroduce igaming into the bill, the story is certainly not over yet.

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