Brazil’s iGaming and sports betting market welcomed 2024 with a landmark step, as President Luiz Inácio Lula da Silva signed Bill of Law 3626/23. This development indicated the final chapter of a long journey, fraught with challenges. The Brazilian sports betting market was legalized in 2018 but the lack of specifically defined regulations left it amidst an uncertain climate.
Earlier in December, the National Congress endorsed the expanded gambling opportunities in a market of enormous potential. The world’s seventh most populous country is home to more than 210 million people.
As per the requirements of the law, licensed operators’ activity will be subject to a 12% tax rate on Gross Gaming Revenue. Additionally, bettors will be required to share 15% of the prize money with the Brazilian government. According to a previous provision, they would have been enabled to keep their winnings in full provided that they did not exceed R$2,112 (approximately US$435).
The Ministry of Finance has asserted that more than 130 companies expressed interest in entering the sports betting market of South America’s largest country. License holders must pay R$30 million (approximately US$6 million) to operate legally and offer sports betting and iGaming products. Licenses will enable operators to run up to three brands and will be valid for five years. The government will demand license holders to establish their company headquarters within the country, aiming to promote local business opportunities and regulate the market more effectively.
A statement from the president’s office clarified the nature of fixed-odds sports bets. Punters will be able to wager on the outcome of a particular sports event, at predetermined odds, reflecting the likelihood of an outcome. Besides betting at land-based and online establishments, players will be able to partake in gaming too, which, however, will be limited to the digital domain.
Brazil’s Government Expects to Launch iGaming and Betting in the Second Half of 2024
The shift to a regulated gambling market is expected to generate up to R$3 billion in tax proceeds for the Latin American country, according to analysts’ estimations.
It will be the Ministry of Finance’s responsibility to refine the regulations under which operators will be supposed to conduct their business activity. They must comply with various internal control policies, including KYC procedures, anti-money laundering and combating the financing of terrorism policies and measures, implementation of responsible gambling tools and practices, upholding the integrity of bets, prevention of gambling addictions, and match-fixing, among others.
As the refinement of the regulatory requirements will take some time, the planned commencement of the market is for the second half of 2024.
The strategic move will spur economic growth and innovation and set an example for other Latin American countries, according to market analysts.