A proposal aimed at the decriminalization of online sports wagering and internet-based casinos in Brazil has seen a delay in voting due to increasing apprehension from Senators against online betting. Preceding this, the Brazilian Senate’s Economic Affairs Committee (CAE) had passed the sports gambling tax legislation which focuses on the regulation and taxation of web gambling venues and sports bets.
The gambling legislation has seen numerous iterations and amendments since its inception. A significant alteration consisted of incorporating internet casino gambling into the legislation, a strategy that, in the eyes of the CAE, could result in augmenting the tax revenues of the country.
Sanctioned by the CEA, the bill proposed a 12% tax for gambling and iGaming operators and included the enforcement of a 15% levy on the winnings for betting participants. These rates show a decrease in comparison to the original suggestion made by the Ministry of Finance.
Despite the strides made in the previous week, the progression of the sports betting bill has once again hit a snag. The legislatorial piece was set to be voted on this Wednesday by the Federal Senate. Local media outlets have reported that the voting was deferred due to the rising concerns of critics who pointed out a lack of exhaustive language pertaining to the regulation of online casinos within the frame of the bill.
Potential Revenue Boost Expected from Online Casinos and Sports Betting
The most recent delay happens at a crucial time, keeping in mind the legalization of betting is an integral part of the fiscal agenda proposed by the Ministry of Finance for the subsequent year. At its core, the proposal aims to aid in achieving a financial deficit of zero without further escalating the national debt.
As a potential font of significant tax revenue, the decriminalization of sports wagering is estimated to bring in an annual BRL12 billion ($2.44 billion). Besides the tax-generated income, Brazil also projects to obtain funds from licensing fees that could reach up to BRL30 million ($6.1 million), granting operation rights to three brands for a five-year term.
In accordance with the new proposal, betting and iGaming activities will be stringently banned for individuals under 18. Also, those grappling with gambling addiction, public office-bearers, as well as employees of betting firms, would not be allowed to partake in the activity. The regulation and introduction of punitive measures, such as fines for non-compliant operators, is a task that will fall under the purview of the Ministry of Finance.
Like many other markets, Brazil anticipates the formation of preventative measures against risks within the online betting industry, including money laundering and other illicit activities. Despite recent forward movement, the proposal is likely to undergo further modifications. These changes could potentially affect its final approval, thereby inducing additional delays to the decriminalization of sports wagering in the nation.
