Sports betting regulation: check out 10 questions and answers about the measure

The iGaming market in Brazil grows every day. Now, with the regulation of sports betting closer than ever, there are some doubts and questions that must be answered.

The global betting industry is attentive to every new development regarding our country. Several renowned players are already or are planning to enter the national market, as the growth potential is immense.

UOL’s “Olhar Olímpico” column recently published an article with fundamental questions and answers about the regulation of sports betting. Check out the full article!

10 questions and answers about sports betting regulation

The Ministry of Finance makes the final adjustments to edit a Provisional Measure for the regulation of sports betting. Given the size of the sector and its penetration in Brazilian football, the discussion has a great impact on sport and society. The column then prepared a guide with questions and answers for you to better understand what is happening.

What does regulation mean?

• Today the sites exist, they buy advertisements, sponsor clubs, receive and pay bets, but they operate on the margins of illegality in Brazil. They are headquartered abroad, usually in tax havens, and do not pay taxes here.
• The PM will say how much they must pay, what the rules are for it to work and how the inspection will take place. An MP must specify a deadline for regulation and it is valid for 60 days, extendable for another 60. In up to 120 days, the topic must be discussed by Congress, to generate a law.

How will the betting fee be charged?

• For bookmakers, the tax is 15% on net income. In each possibility of betting (for example, who will win Flamengo x Fluminense), it receives an amount of money from the bettors. At the end of the game, she distributes around 87% to those who hit the bet and keeps 13%, which is her net income. Of this slice of the cake, it will have to pay 15% to the Union, already including IR, PIS and Cofins. The other 85% cover the costs of the bookmaker and give the profit to the company.
• Bettors, on the other hand, will be taxed by the Income Tax, with earnings below BRL 28.5 thousand per year being exempt, as in the payment of wages, for example. Winnings will need to be declared.

With the tax, will the betting prize decrease?

• Possibly, but that will depend on each bookmaker. Their operating cost will be higher, either because of this 15% tax, the payment of the grant (R$ 30 million for five years) or the requirements that will be imposed by the government for them to operate in the country, including the hiring of part of the workforce. of work in Brazil. At the same time, greater legal certainty should increase their revenue, diluting costs.

Will the tax ‘encourage’ illegality?

• The government seeks “consistent taxation” to prevent this from happening and cites Great Britain to apply a 15% Gross Gaming Revenue (GGR) tax to such net income. There, 87% of games take place in legal venues. In Portugal, where the taxation is on the bet, only 30% of them are carried out legally.

How much will you stay with the clubs?

• The 2018 law that authorized sports betting already provided that 1.67% of the GRR should be paid “to Brazilian sports entities that assign the rights to use their denominations, their brands (..) for the dissemination and execution of the betting lottery fixed quota”. This week, the big clubs in São Paulo and Rio approached the government to say that they think the value is low. And they pledged to present a proposal next week.
• The distribution contained in the MP, however, should not be definitive. It is common that, arriving at Congress, several sectors defend taking a piece of the cake. By the 2018 law, 0.82% goes to education and 2.55% to the National Public Security Fund (FNSP).

How will resources be divided between clubs?

• This is an ongoing discussion. The CBF wants to keep 20% of the value of each bet involving its competitions, but the clubs find the amount excessive. The remainder would be split between the teams involved in the bet. The rule would apply to all sports and confederations. In addition, the government understands that, when the bet involves an athlete (for example, that a player will score a goal), he is the one who must be paid the percentage, regardless of the result of the bet (whether he scores or not). .
• There is even a more complex discussion: what to do with the 1.67% rate of bets involving foreign clubs? The idea is to distribute the money among Brazilian teams, but it is not clear how this would happen.

Will the Ministry of Sport, the COB and other sporting entities receive anything?

• In the case of confederations, only what is related to competitions organized by them, which is a tiny slice of the market. Basketball, tennis and motorsports can do well by inheriting the fee for betting on professional events abroad, such as the NBA, Formula 1 and the ATP and WTA circuits.
• The Ministry of Sports, however, does not benefit directly from sports betting.
• The government, however, promises to bid Lotex again, the good old “scratch card”, now allowing Caixa to participate in the competition. The expectation is to raise BRL 5 billion a year, with around 6% of that (0.9% of each bet) going to the Ministry of Sports. Clubs would also gain by surrendering their marks, taking 1.5% of each bet.

Who will supervise the bets to avoid manipulations?

• The Ministry of Justice. There is an agreement with the Treasury so that the 2.55% earmarked for the FNSP are applied to inspect bookmakers and combat match fixing. Regarding the tax part, the Treasury wants to create an internal structure to take care of this operation.

What if I want to bet on a site hosted abroad, as it is today?

• The government promises to prevent this from happening. One of the ways is to propose the criminalization of this, which depends on Congress. Another is preventing advertising in the country, whether on TV, sponsored by clubs, or on social networks. Without advertising, the sites may even exist, but they will have difficulties in attracting customers. In addition, the Treasury intends to create mechanisms to control the means of payment.

Does the regulation include online casinos?

• No. They will remain banned, as they are today. Bookmakers that maintain the casino option will have their registration revoked and, operating illegally, will be subject to the penalties that the government wants to be created. There is a possibility that Congress will seize the moment and authorize the casinos, but given the influence of the evangelical bench, this is very unlikely to happen.