2024-02-02 19:11

Brazil Opens Up to Gambling

Brazil authorizes sports betting and online casinos, launch expected late 2024 At the end of the year.

Signed into law by President Luiz Inácio Lula da Silva on December 30th, Law 3626/23 marks a significant change in Brazil's gambling landscape, making it the seventh most populous country to embrace this form of entertainment.

The legislation imposes a 12 percent tax rate on the gross revenues generated by sportsbooks and iGaming operators, with an additional requirement that bettors share 15 percent of their winnings with the federal government. Notably, a provision allowing players to keep winnings of up to R$2,112 was removed when the bill was signed into law.

Online gambling companies can now apply for both iGaming and online sports betting concessions. The license is worth $6 million and can be renewed every five years upon approval. However, licensees must establish a physical presence in Brazil before they can begin operating online casinos and sports betting.

President da Silva's office explained the scope of the law:

"Fixed odds sports betting is betting where the bettor knows exactly what the winnings are at the time of betting and is linked to sporting events. The following types of bets are regulated by the new law: virtual bets, physical bets, real sports events, online gambling and virtual online gambling."

With an expected annual tax revenue of over $2 billion once the market matures, Brazil is preparing for a significant economic boost from this gambling liberalization.

However, regulations need to be developed on the way to implementation, and this task has fallen to the Ministry of Finance. The government has stated that these regulations are necessary to address issues such as money laundering, the financing of terrorist activities, and the prevention of the proliferation of weapons of mass destruction.

Brazil has traditionally had restrictions on gambling: only poker is recognized as a game of skill and therefore allowed. The Mega Sena lottery and some types of bingo in charitable organizations are also allowed. The introduction of iGaming and sports betting represents a landmark expansion of the Brazilian gambling sector.

Despite Brazil's per capita income of $17,260, which the World Bank classifies as upper-middle income, the potential for growth in this huge market is undeniable.