JUE 16 DE SEPTIEMBRE DE 2021 - 19:42hs.
Marcel Belfiore, partner at Ambiel Advogados

"I see it unlikely that foreign bookmakers will establish and operate from Brazil"

For Marcel Belfiore, partner at Ambiel Advogados, and specialist in Sports Law, betting, online gaming, media and entertainment, just reducing taxes will not make the nationalization of bookmakers interesting. “Most of them pay lower tax than they would pay here, even with this reduction.” In an interview with Jornal dos Bairros, he states that “the change in the law to the GGR model makes taxation fairer and, certainly, more profitable to the bookmakers that will set up in Brazil.”

With an eye on a rapidly growing market, that of online betting, which generated R$ 7 billion in Brazil in 2020, the current government seeks to regulate Law 13,756, which regularized sports betting in the country in 2018. Generalist, the text approved even in the government of President Michel Temer leaves loopholes on the concessions for the exploration of betting, its rules and other details. The deadline for regulating the law is December 2022.

This year, another step was taken to open the doors of Brazil to this market: Law No. 14.183/21 changed the taxation on the activity, which was no longer on the gross value and became on the net amount, and revenue division, which provides lottery operators with 95% to cover costing and maintenance expenses. Without the regulations, bets can only be placed on sites based outside the national territory.

For Marcel Belfiore, a lawyer specializing in Sports Law, betting, online gaming, media and entertainment, and a partner at Ambiel Advogados, just reducing taxes will not make the nationalization of bookmakers interesting. "I think it unlikely that foreign bookmakers would establish themselves in Brazil and start operating from here. Most of them operate in tax havens and pay less tax than they would pay here, even with this reduction."

Next, the lawyer analyzes other aspects of the law:

Jornal dos Bairros - Can tax cuts encourage the creation of Brazilian bookmakers?
Marcel Belfiore -
The change in the law makes taxation fairer and, certainly, more profitable for bookmakers in Brazil. Instead of paying tax on the total revenue of the business, as originally foreseen, the operator will pay tax on the difference between the collection and the prize paid.

What changes for the bettor?
For the gambler, the tax scenario doesn't change much. Although there was no legal provision, the Federal Revenue had already positioned itself on financial income from abroad through betting. Taxation is now expressed in law.

What will change significantly will be the type of bet. Today, on sites hosted outside Brazil, it is possible to bet on games that are prohibited in the country. This is because Brazilian law does not reach those houses that follow the laws of the countries where they are located. Bookmakers operating in national territory will have to comply with the limits established by Brazilian law.

The government's goal is to open houses in the country with a view to the 2022 World Cup. Is there time for that?
Since it is precisely the regulation that will establish the procedures and requirements for the authorization or concession of operation in national territory, it is very difficult to predict the time needed for companies to be operational in Brazil.

Can legalization expand sports sponsorship in the country?
The growing increase in betting sites sponsoring clubs and competitions in Brazil is a consequence of the legalization of the activity, although still pending regulation. This is because the Brazilian Advertising Self-Regulation Code prohibits advertisements that induce the practice or encourage activities considered illegal, a situation of betting activity prior to the enactment of Law 13.756/2018. Today, nothing prevents them from running their brands in other sports or even in non-sporting events.

What is your opinion on the proposed license limit in the law?
In theory, the greater the number of licenses granted for this activity, the greater the competition and the better the product for the consumer. However, as this is an extremely sensitive activity, whether in terms of inducing addiction or in terms of the possibility of manipulating sports results, a very high number of companies operating can make inspection and control difficult.

It is necessary to find a balance in this equation so that there is no harm to the mental and financial health of bettors and that the integrity of sports competitions subject to betting is preserved.

Source: Jornal dos Bairros