Samba Para Todos: Brazil Prepares to Regulate iGaming in its Own Very Specific Way
Published December 16, 2018 by Lee R
After years of in-fighting, corruption and bureaucratic delays, new legislation has Latin America's largest economy ready to implement regulation.
In a major development for a region where regulation has been delayed interminably, sports lottery has been approved in Brazil.
Distribution Agreement
President Michel Temer has approved the sports lottery measure to divert a greater share of lottery funds from the country’s national lottery Lotex to public security, sport and culture.
The now signed Provisional Measure 846/2018 has revised distribution of the nation’s lottery proceeds with the first authorization ever in Brazil of online and land-based fixed odds sports betting.
Final Salute
As one of the final acts of President Temer as he prepares to leave office in three weeks, Temer called the signing ceremony “a brilliant afternoon for public safety, culture, sports and, above all, the Brazilian people.”
Quick Passage
PM 846 was pushed through relatively rapidly via approval of a Chamber of Deputies committee in the first week of November, then clearing the full Chamber and the Senate in back-to-back sessions less than two weeks later.
The legislation gives Brazil’s Ministry of Finance two to four years to generate a sports betting regulation and licensing model.
Monopoly Rumor
While PM 846 states calls for betting to be conducted “in a competitive environment,” the word is that Brazil intends to introduce its betting market in a monopoly format.
The Outline
Nonetheless, some very specific figures have been released in the legislation suggesting that the foundation for an increasingly privatized iGaming model is being laid.
The bill covers both land-based and online sports betting, with land-based operators required to pay out 80% of handle in winnings and split 6% between a number of social and security bodies. Of this 6%, 2.5% will go to the National Public Security Force (FNSP), 2% will be allocated to football clubs, 1% to public schools and 0.5% deposited into Brazil’s social security fund.
Online companies are required to pay 89% of wager revenues back to players as winnings, plus 0.25% to social security, 0.75% to schools, 1% to the FNSP and 1% to football clubs.
Outlook
This is quite a substantial transformation from a country that seemed mired in infrastructural issues to a highly developed revenue and distribution infrastructure which is looking like one of the most highly developed regulation models coming into existence in Latin America's largest market. It will be interesting to see what the regulatory future holds for online gambling in the country.
