Earlier this week, the Government of Brazil issued a provisional decree to officially give the green light to sports betting and to implement an 18% tax on companies’ revenues. The move comes at a time when there is an ongoing investigation that involves multiple players in a match-fixing scandal.
The decree of President Luiz Inacio Lula da Silva was sent to Congress, which is supposed to have a vote on it within the next 120 days so the provisional decree remains valid. The National Congress, however, may decide to block the legislative measure.
The country’s Finance Ministry has shared some expectations that the implementation of the new rules could eventually bring Brazil’s coffers no less than 2 billion Brazilian reals in tax from sports betting operators in 2024 in case the lawmakers confirm the measure. The Ministry will now have to establish the National Secretariat for Games and Betting (SNJA) which will become the body responsible for the regulation of the sector. The new watchdog will also have to establish license procedures and other pieces of technical regulation to make sure the new form of gambling runs smoothly in the country.
Local punters will not be forced to pay any tax in case they generate winnings of a little over 2,100 Brazilian reals on each bet. Bettors will have to pay a 30% income tax for any gains from sports betting activities above that amount.
The official implementation of Provisional Measure No.1,182 basically means that the sports betting regulations that Brazil greenlighted in 2018 through Law No. 13,756 have been finally passed, after making a number of amendments. The approval and passing of the sports betting legislation has been considered a watershed moment for the country.
Ongoing Investigation into Alleged Match-Fixing Spreads
President da Silva’s decree is unveiled less than a year after an investigation by the attorney’s office in Goias revealed that some Brazilian players had been offered between 47,500 Brazilian reals and 95,000 Brazilian reals to perform specific actions while being part of a game, such as receiving yellow cards or giving away penalty kicks. The investigation further found that alleged criminals would then place wagers on betting sites and draw profits from their unlawful actions.
The investigation has spread to the country’s Congress and federal police earlier in 2023, including about 20 matches within the top-tier and the second divisions, and within some local state leagues. In May, a district attorney informed local media hubs that the scandal had the potential for international reach because some of the suspected criminals have allegedly had contacts in the US, Lithuania, and Greece.
So far, a Goias court has pressed charges against 31 individuals accused of participating in the illegal match-fixing scheme, including 15 soccer players in the first and second divisions of the country’s football league.
The move has been welcomed by Marcos Sabiá, the chief executive officer of the sponsor of the Brazilian championship, the galera.bet betting operator. He shared that the President’s decree would bring some regulation and legal protection for the sector. Mr. Sabiá further noted that the proposed piece of legislation would establish the limits to the operation of betting operators, as well as local punters’ rights and assurances, the means for cooperation between gambling and betting companies and competent authorities so that no more match-fixing is allowed, as well as the suspension of operators that do not hold an operating permit issued by the country’s regulators.