South American powerhouse Brazil has taken a giant leap towards legalizing sports betting and iGaming. Bill 3626/2023 has been languishing in the legislative process, and the latest move by the Brazilian Chamber of Deputies will be a relief for all the proponents of sports betting and iGaming in the country.

The vote to approve the sports betting & iGaming regulation bill was carried out on 21st December and follows the Senate’s approval of the same, which happened on 12th December. The bill is now headed to the office of President Luiz Inacio Lula da Silva, where it is expected to receive its final approval.

While the move is being lauded and celebrated in many quarters within and outside Brazil, it was not all plain sailing for the bill. It faced fierce opposition from evangelical deputies, who, as you can imagine, have long been opposed to the idea of the bill, sighting moral grounds against gambling practices. These evangelical deputies vehemently tried to shoot down the bill, arguing that it would have led to widespread addiction, financial ruin, and other social ills. This was particularly echoed by Deputy Eli Borges of the Evangelical Parliamentary Front, who opined critically:

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“We are taking another step forward to involve young people and Brazilian citizens in an unprecedented game.”

While it faced severe opposition, a faction of foot soldiers also emphatically defended it from the various attacks. This section of deputies was led by Speaker Arthur Lira, who argued that gambling was already widespread and that legalizing it only made sense. He argued that it is better for gambling to be carried out in a regulated manner that would also protect the interests and well-being of the Brazilian population. This group argued that legalizing sports betting and iGaming would bring the industry under control, preventing money laundering and exploitation.

The Chamber of Deputies’ speaker also pointed out that the bill had been through the Senate, where evangelical senators had scored some significant victories in exchange for the safe passage of this bill. According to Speaker Lira, the delay in launching regulated online gambling would only serve to strengthen an already thriving underground sports gambling world.

What’s In Bill 3626/2023?

The Brazilian Senate had earlier excluded online gambling from the provisions of this bill. This was, however, undone by the Chamber of Deputies, and it’s now a matter of time before the Brazilian iGaming sector goes live. The Evangelical deputies had tried their best to rally for removing the ‘online casinos’ text during the highlights but were eventually defeated in a vote. The specific language sailed through on 261 votes in favor, while 120 Deputies voted to have the text removed.

Looking at the tax provision, the bill maintains the Senate’s imposed 12% tax rate on gaming operators. Bettors will also be required to pay a 15% personal income tax on the net value of the prizes they will have won. This tax will be charged on the total number of bets you have placed in the past year but will only be applicable if the amount won is above R$2112 (~$433).

Regarding how this tax will be divvied, the bill determines that 2% of the total tax collected will be channeled toward the social security contribution. The resources will further be divided, with education, sports, and tourism receiving cuts of 1.82%, 6.63%, and 5%, respectively. Meanwhile, the gaming operators will be allowed to keep 88% of their revenue; the remaining 12% will be channeled towards public safety, education, sport, and other vital sectors of the Brazilian economy.

Bill 3626/2023 also states that sports betting and iGaming wagers will be handled by entities headquartered and operated within Brazilian territory. Operators will also need to extensively demonstrate that they meet specific qualifications for handling wagers, alongside other requirements that the executive will determine.

Additionally, operators must have at least one Brazilian member on their board with a share capital of 20% and above. Still, on the issue of operators, those interested in setting up shop in Brazil will also be required to pay up to R$30 million to exploit up to 3 commercial brands for up to 5 years.

The bill also highlights several punishments for various sports wagering and iGaming irregularities. For instance, there is a clause authorizing the suspension of payments for wagers suspected of manipulating results. Operators have also been tasked with ensuring that their customer activities on their platform do not lead them to any potential losses.

Finally, underage players (Under 18 years), players diagnosed with gambling disorders, and people with influence over gambling activities, like sports directors, players, coaches, and athletes, have also been banned from any form of wagering.

Commendable Dedication to Responsible Gambling Measures

Showcasing their commitment to the Brazilian people’s well-being, the Senate and the Chamber of Deputies added critical responsible gambling clauses that will take effect after sports betting and iGaming are operational. For instance, operators must implement measures to ensure their players won’t succumb to addiction.

Case in point, betting actions and ads from operators must include warnings about the potential ills that may befall gamblers in their practice. These ads will also have to adhere to restrictions on broadcast times and the channels they will be conveyed through. Operators will further be required to advise players on responsible gambling practices so that they can stay in control as they have fun.

After nearly 5 years of endless negotiations and tinkering, there is an air of excitement in the Brazilian gambling circles as the sports betting dream is closer to reality than ever. It remains to be seen how the Brazilian sports betting and iGaming scene will unfold over the coming years, given that it has the potential to be among the largest globally.