Brazil's Senate Approves Sports Betting Bill, Excludes iGaming

In a significant development in Brazil's legislative landscape, the Senate Plenary voted on 12th December to pass Bill 3,626/2023 to regulate sports betting within the country. However, in a notable shift from earlier proposals, the Senate decided to remove iGaming from the bill.

Initially scheduled for a vote on 6th December, the bill faced a delay due to an insufficient number of senators to conduct the vote. Introduced by Senator Angelo Coronel, the bill underwent several amendments following its endorsement by Brazil's Economic Affairs Commission three weeks prior.

During the latest voting session, a crucial amendment presented by Senator Carlos Portinho garnered significant attention: the exclusion of iGaming from the bill. This amendment was passed with 37 votes in favor and 27 against. Alongside this, the Senate also voted to remove virtual games and sports betting terminals from the bill and declined an amendment that would have prohibited sports betting advertising in stadiums.

Additionally, all tax recommendations by the Economic Affairs Commission from 22nd November were approved. Notably, the gross gaming revenue (GGR) tax will be capped at 12%, reduced from the previously proposed 18%. Modifications were also made to the taxation of bettors' winnings. Now, bettors will be taxed annually at a 15% rate on net winnings exceeding R$2,112.00. Moreover, licensees must pay an initial fee of up to R$30 million, allowing them to operate up to five distinct brands.

As the bill has cleared the Senate, it now goes back to the Chamber of Deputies for reassessment. While the Chamber had previously approved the bill in September, it must now review and vote on the amendments made by the Senate. This process must be completed before the Christmas recess, which starts on 23rd December, leaving a tight window for further legislative action.

The exclusion of iGaming from the bill has been a point of contention and may impact the projected revenue from taxes and license fees. Initially estimated to generate around BRL1.6 billion, the expectation has now been adjusted to approximately R$700 million, significantly lower than the original forecast.

As the bill returns to the Chamber of Deputies, iGaming could be reintroduced into the legislation. This potential change hinges on the upcoming vote in the Chamber, where debates around the inclusion of iGaming are expected to be intense. Despite the Senate's decision to exclude iGaming, the final shape of Brazil's sports betting regulation remains uncertain, pending the Chamber of Deputies' vote.