Brazil’s Senate’s Committee on Economic Affairs (CAE) greenlit a proposal on November 22 to regulate and tax the burgeoning market of online sports betting and casinos in the country.
The approved bill lays out regulations governing the operations of betting houses in the country. It proposes a 12% tax on companies operating in the sector and a 15% tax on the winnings accrued by bettors – a rate slightly lower than what the Ministry of Finance had initially suggested.
The committee also passed a request for an expedited vote on the proposal, already approved by the Chamber of Deputies, to be scheduled in the main plenary session of the Senate. Senate President Rodrigo Pacheco had hinted on November 21 that the bill could be on the agenda for this Wednesday’s session.
Senator Angelo Coronel, the bill’s rapporteur, expressed optimism about a plenary vote happening next week rather than the current week.
The proposed regulations are intended to cover fixed-odds bets on real sporting events and online gaming events such as casinos. The Ministry of Finance sees this initiative as a key revenue stream for the Union in the coming year, aligning with its broader goal of achieving a fiscal deficit of zero by 2024 without increasing public debt.
The proposed legislation focuses on regulating the online sports betting and casino sector, outlining key facets for operational compliance. The authorization process for online betting companies involves a thorough evaluation by the Ministry of Finance, considering documentation, company reputation, and technical and financial capacity.
To ensure local involvement, the rapporteur recommends that at least 20% of a company’s social capital be held by a Brazilian citizen. Those associated with betting houses will be barred from engaging in football corporations, sports organizations, financial institutions, or payment processors handling bets.
For accreditation, companies must pay a licensing fee of up to BRL30 million ($6.1 million) in Brazil, valid for three commercial brands over five years.
Restrictions on participation extend to individuals under 18, betting house personnel, public officials, and those diagnosed with gambling addiction. Facial recognition technology will be mandated for player identification. Oversight will fall under the Ministry of Finance, with penalties ranging from warnings to fines based on revenue percentages. The legislation emphasizes security measures, auditable systems, and actions against money laundering and terrorism financing.
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