Is Online Sports Betting Legal in Brazil?

Until December 2023, online sports betting was prohibited in Brazil. However, Law No. 14,790, sanctioned at the end of last year, changed this scenario. This new law establishes a regulatory framework for fixed-odds betting on sporting events and online games.

What are Fixed-Odds Bets?

Fixed-odds bets, also known as pre-match bets, are those where the odds (probabilities) are defined by the sportsbook before the sporting event takes place. The bettor chooses the outcome they believe will occur, and if they are correct, they receive a prize according to the stipulated odds.

How Does Online Sports Betting Regulation Work?

Law No. 14,790 determines that companies interested in operating in the online sports betting market need to obtain a license from the Ministry of Economy. The licensing process is still being defined by the government, but the expectation is that the first licenses will be granted in 2024.

Key Points of the Regulation

The new regulation for online sports betting in Brazil presents some important points:

• Licensing: Only companies licensed by the Ministry of Economy will be able to offer online sports betting in the country.
• Taxation: Bookmakers will be required to pay a tax on their gross gaming revenue (GGR). The exact rate has not yet been defined, but it is estimated to be around 18%.
• Consumer Protection: The law provides for consumer protection measures, such as the requirement for bookmakers to clearly and transparently inform players of the game rules, as well as establishing limits on the amount wagered.
• Combatting Illegal Gambling: The regulation aims to combat the illegal sports betting market, which moves billions of reais in Brazil.

Advantages of Regulation

The regulation of online sports betting in Brazil brings several advantages, such as:

• Legal Certainty: The law offers legal certainty for companies wishing to operate in the Brazilian market.
• Consumer Protection: Bettors will have greater protection against fraud and abusive practices.
• Tax Revenue Collection: The regulation will allow the government to collect taxes on the revenue of bookmakers, generating resources that can be invested in areas such as health, education, and public safety.
• Combatting Organized Crime: Combating the illegal betting market helps weaken organized crime.

Challenges of Regulation

Despite the advantages, the regulation of online sports betting also faces some challenges:

• Definition of Licensing Rules: The licensing process for bookmakers still needs to be defined by the Ministry of Economy. This creates uncertainty for companies interested in operating in the market.
• Combatting Illegal Gambling: Monitoring the market to prevent illegal bookmakers from operating will be a challenge for the government.
• Social Impact: Policies for prevention and treatment of gambling addiction (ludomania) need to be implemented to minimize the negative social impacts of sports betting.

Conclusion

The regulation of online sports betting in Brazil is a significant milestone for the industry. The new law brings legal certainty for companies, consumer protection, and the possibility of tax revenue collection. However, there are challenges that need to be overcome, such as defining licensing rules, combating illegal gambling, and implementing responsible gambling policies.