The Provisional Measure (MP) was formulated as an alternative to the decree that increased the Tax on Financial Transactions (IOF), which was rejected by Congress and also replaced this Wednesday (11). The partial reversal of the decree was also published in the Official Gazette (DOU).
The government's proposal is to reinstate the 18% rate on the Gross Gaming Revenue (GGR) of betting platforms, which was the original proposal from the Ministry of Finance when the sector's regulation was submitted to Congress. The rate ended up being fixed at 12%.
Section VIII – On combating the exploitation of fixed-odds lottery betting without authorization, from Law No. 14.790/2023, introduces the following changes to existing rules:
* Mandatory cooperation by internet companies
(Art. 17, § 6)
Who is affected: Internet service providers and application providers (websites, apps, social networks, etc.).
What changes: These companies must establish an exclusive, permanent communication channel with the regulatory body (Ministry of Finance) to promptly comply with orders such as website blocking or suspension of illegal betting services.
Purpose: Speed up the crackdown on unauthorized fixed-odds betting platforms.
* Prohibition of relationships with illegal operators
(Art. 21, sole paragraph, items I to III)
Prohibited actions include:
- Companies must implement internal procedures to prevent relationships with illegal betting operators.
- Commercial ties with such operators are forbidden.
- Companies must report relevant data to the Ministry of Finance as per regulation.
Purpose: Cut off logistical, technical, and financial support to illegal operators, making it harder for them to operate.
* New administrative infractions
(Art. 39, items VII, VIII, and IX)
These new infractions allow authorities to more broadly punish illegal betting-related conduct:
- VII: Violation of legal and regulatory norms under the supervision of the competent administrative body.
- VIII: Engagement in sports fraud, match-fixing, or any practice that affects sports integrity.
- IX: Violation of Article 21, i.e., maintaining relationships with illegal operators.
* Personal and advertising restrictions
(Art. 40, items II and III)
- II: Individuals involved in illegal activities may not serve in executive roles at companies regulated by the Ministry of Finance.
- III: Advertising and promotion are prohibited for any agent (physical or digital) that promotes unauthorized betting operators.
The new measures aim to:
* Strengthen digital oversight with the participation of internet companies.
* Explicitly prohibit commercial relations with illegal operators.
* Penalize serious new infractions, including sports manipulation.
* Restrict advertising and the participation of individuals linked to illegal betting.
Following pressure from Congress, which threatened to overturn the decree that raised the IOF, the new package was presented to allied leaders on Sunday and approved by President Lula in a meeting on Tuesday. The President of the Chamber of Deputies, Hugo Motta (Republicanos-PB), has already stated there is no commitment to pass the measures.
Finance Minister Fernando Haddad downplayed Motta’s remarks: “It was a prudent statement. There weren’t 513 lawmakers present. How could he make a decision without consulting the parties? Now tell me, what Ministry of Finance proposal hasn’t passed after negotiations?”
The Provisional Measure takes effect immediately upon its publication in the Official Gazette and is initially valid for 60 days, extendable once for another 60 days. During this time, it must be reviewed by a Joint Congressional Committee composed of deputies and senators, which will issue an opinion on the text.
Afterward, the measure is voted on by the full House of Representatives and the Federal Senate. If approved without changes, it is enacted into law. If amended, it may return for further review or be partially vetoed by the President.
The MP is valid for up to 120 days. However, changes related to income tax will only apply from 2026, in compliance with the principle of annuality, while increases to the CSLL (Social Contribution on Net Profit) are subject to a 90-day waiting period. If the MP is not approved by Congress within 120 days, it loses its effect.
Below are the full excerpts of the Provisional Measure that involve changes to the sports betting and online gaming market:
CHAPTER IX
OTHER AMENDMENTS TO LEGISLATION
Section I
Fixed-odds betting
Art. 61. Law No. 13.756, of December 12, 2018, shall now include the following amendments:
"Art. 30.
§ 1º-A From the proceeds collected, after deducting the amounts mentioned in items III and V of the caput of this article, 82% will go to covering operating and maintenance expenses of the fixed-odds betting lottery operator and other betting games, excluding lottery modalities already provided for in this law; 6% will go to social security for healthcare-related actions, without prejudice to the allocation in item IV-A; 12% will be allocated as follows:
§ 9º The contribution referred to in item IV-A and the caput of § 1º-A of this article shall be calculated and paid monthly by the operators, as established by the Special Secretariat of the Federal Revenue of Brazil of the Ministry of Finance, under the powers described in Article 2 of Law No. 9.003, of March 16, 1995.
Section VIII
On combating unauthorized fixed-odds betting
Art. 70. Law No. 14.790, of December 29, 2023, shall now include the following amendments:
"Art. 17. ......................................................................................................
§ 6º Internet service providers and application providers must maintain an exclusive, permanent, and functional communication channel with the regulatory body to receive and promptly handle orders under this article, ensuring a swift response aligned with the urgency of the measures." (New wording)
"Art. 21. ......................................................................................................
Sole paragraph. The prohibition in the caput includes:
I - the implementation of internal procedures to comply with this obligation;
II - a ban on maintaining relationships with legal entities operating fixed-odds betting without authorization as per this Law;
III - the communication of data as specified in regulations issued by the Ministry of Finance." (New wording)
"Art. 39. ......................................................................................................
VII - violation of legal and regulatory standards enforced by the competent administrative body;
VIII - engaging in, encouraging, permitting, or in any way contributing to or participating in practices harmful to sports integrity, result uncertainty, fair competition, transparency of applicable rules, or any other form of fraud or undue interference that compromises the integrity or fairness of sports-related conduct;
IX - violation of Article 21 and its regulation. (New wording)
"Art. 40. ......................................................................................................
II - individuals may not serve as executives, board members, or in any statutory positions in entities under the jurisdiction of the Ministry of Finance, under the terms of this Law;
III - no form of advertising or promotion—whether physical or digital—may be carried out on behalf of any agent who engages in fixed-odds betting activities without proper authorization. (New wording).
Source: GMB
