Posted on: January 3, 2024, 11:45h.
Last updated on: January 3, 2024, 11:46h.
Brazil over the holidays officially authorized sports betting and online casino gambling in the world’s seventh most populated country.
President Luiz Inácio Lula da Silva signed Bill of Law 3626/23 on Dec. 30. The National Congress of Brazil lent its support to the expanded gaming earlier in the month.
The legislation sets an effective tax rate of 12% on gross proceeds won by sportsbooks and iGaming operators. The law also requires that bettors share 15% of their winnings with the federal government.
In signing the gaming bill, da Silva amended the statute to remove a provision that would have allowed players to fully retain winnings up to R$2,112 (US$435).
Online gaming firms can apply for both iGaming and online sports betting rights. Upon approval, concessions cost $6 million and are renewable every five years. Licensees must establish a physical presence in Brazil before operating online casino games and sports betting.
“Fixed odds sports bets are those in which the bettor knows exactly what the rate of return is at the time of the bet and are related to sporting events. With the new law, the following are regulated: virtual betting, physical betting, real sports-themed events, online gaming, and virtual online gaming events,” a statement from da Silva’s office explained.
Brazil expects the gaming liberalization to generate over $2 billion a year in new tax proceeds upon market maturation.
With da Silva signing the iGaming and sports betting bill, the Ministry of Finance will be tasked with crafting regulations that will govern the forthcoming operations. The government agency has also been instructed to implement policies to prevent money laundering and the financing of terrorist activities and “the proliferation of weapons of mass destruction.”
The regulations will take some time to complete. Brazil’s government expects the gaming to begin sometime in the “second half of 2024.”
Most other forms of gambling remain illegal in Brazil. There are no casinos with slot machines or house-banked table games, but poker is considered a game of skill and is therefore allowed. Brazil also runs a lottery called the Mega Sena. Some forms of bingo are also allowed in charitable settings.
iGaming and sports betting, however, represent the greatest expansions of gambling in Brazil in decades. Experienced operators are expected to consider bids once the regulations are determined.
Though per capita income according to The World Bank was just $17,260 last year, that still classifies Brazil as an “upper middle income” market. Brazil is home to over 203 million people.
To understand just how enticing entering Brazil might be for gaming operators, it was only a few years ago that billionaire Sheldon Adelson was making trips to the South American country to woo leaders to permit casino gambling. Adelson died in 2021 at the age of 87.
Asked during a trip to Sao Paulo in 2018 about why he was in town, Adelson didn’t mince words.
To consider investing in one or more integrated resorts,” Adelson answered.
The billionaire’s visit came with lawmakers mulling efforts to legalize commercial casinos. The push never materialized, and Adelson never fulfilled his wishes of taking his Las Vegas Sands empire to South America. New legislative efforts, however, to authorize brick-and-mortar casinos are underway.