“Brazil is a country where people are very fond of football. And with the popularization of sports betting, now people are cheering and betting too”, said Magnho José, president of the Instituto Brasileiro Jogo Legal (IJL). It is estimated that approximately 25 million Brazilians bet weekly.
Today, Cuiabá is the only team in Série A of the Brasileirão that is not sponsored by betting companies. In addition to club uniforms, bookmakers appear in TV advertisements, portals, lawn signs, team shirts and social networks.
“We estimate that the movement in this market is already at R$ 120 billion, in gross values. Within this scenario, R$ 12 billion is being used to pay for the media and guarantee the profitability of the operations”, says Magnho José.
Expectation for regulation
The Ministry of Finance has already informed that it will soon regulate and tax the segment, according to Minister Fernando Haddad at the beginning of the month. Sports betting was legalized in the country by law 13.756/18, in December 2018, by then-President Michel Temer.
The law provided for two years for regulation, but the Bolsonaro government did not meet the deadline. The platforms continue to operate in Brazil, but with representations abroad and not being taxed by the government.
“The omission generated an explosion in the offer of unregulated gambling”, observes Magnho José. The estimate, according to José, is that there are more than 1,000 sites operating in the country. “The street betting stands can’t even scale. But today we have practically 90% of the market in the hands of 7 to 8 larger companies”, he explains.
In a note, the Ministry of Finance informed that a Provisional Measure on the sector will be forwarded to the Civil House. There are still no estimated dates. The MP will allow the ministry to initiate the regulation of the activity, regulating all the requirements for the operation of the sites, rules of taxation, advertising, inspection of sporting and financial integrity of betting in the country.
“Only companies that are financially healthy and able to operate within the rules will be able to stay. A series of regulations will establish requirements, including to prevent the houses from being used to launder money”, stressed the president of the IJL.
A recent survey carried out by Instituto Paraná Pesquisas showed that 55.2% of Brazilians are in favor of taxing online gambling.
Sports betting companies and taxation
“For players, it is even greater security to know that they are with a licensed company; it is a serious company. We are in favor of regulation, but we are waiting to see how the government will work on this issue of taxation. Let it not be a taxation that inhibits the market itself, as we had in France”, explained EstrelaBet’s business director, Fellipe Fraga.
In France, taxation is 2% on the gross value, which is equivalent to approximately 35% on the net value of homes — a rate considered high in the sector. “I believe that Brazil will adopt a more intelligent measure than that”, observes Fraga.
Marcos Sabiá, CEO of Galera.bet, says that after the regulation, investments will increase in Brazil. “We will bring technology structures, which will be important for job creation and knowledge transfer. We want a long-term relationship with the country”, he details. Sabiá explains that the current legal limbo ends up leading companies to operate abroad.
Galera.bet is part of the Associação Nacional de Jogos e Loterias (ANJL), created on March 15th to represent bookmakers in Brazil and promote good practices in the sector, such as responsible gaming, protection of user data and prevention of practices illicit on the market.