Brazil Inching Closer to Legal Sports Betting

The Chamber of Deputies in Brazil has given the green light for a sports betting bill that will legalize sports betting for the first time in the history of the state. The country’s lower legislative body has also signalled approval for provisions for the lottery.

The approved measures

On 20 November, the Chamber of Deputies gave its approval for the provisional measure 846/2018.

Part of the motion discusses how lottery revenues will be split among public security, social and cultural programs. It also advocates the legalization of both online and offline sports betting.

There was only a single vote in opposition to this measure. The vote against was made by Gilberto Nasciemento, an MP for the Social Christian Party, who wondered whether allowing online gambling would “create a generation of addicts to generate a few million réals more for the public safety fund?”

Breakdown of intake

Under the proposal, offline venues would need to be paying out at least 80% of their handle to bettors, while their gross revenues could not be greater than 14% of the total, to uphold a competitive environment.

The other 6% would go to a variety of government programs. Online operators would need to pay out at least 89% of total intake to bettors. Their operating revenue can only be 8%; the rest will go to government programs.

Under the legislation, the Ministry of Finance has up to two years to create the appropriate regulations for the sector. It will also be in charge of issuing licenses, of which no details have been given as of yet.

Next legal steps

The next step for the legislation is the Senate, which is now somewhat urgent. Approval must be given by 28 November, as the measure is currently provisional. It looks much likelier to gain traction than other recent gambling bills, which will not be seen until 2019.

The new minister of justice, Sergio Moro, is in favor of this motion. He wants the additional funding to go towards the security forces, as this is something that they really need.

Legalization of sports betting  would be a major win for Brazil, which is sports mad. The national online lottery has been running since August and has had sales of more than $12m since its launch. To date, over 413,000 people have accounts with the online platform.

Other gambling issues in Brazil

Gambling expansion has been talked about in Brazil since 2014. At that time, a casino legalization bill was being pushed and certain regulations were passed for online gambling.

The current sports betting measure was proposed in March 2018, but was rejected. However, if the Senate supports it, then it will be good to go.

Opposition parties are pushing a similar bill. However, they want offline casinos to become legal and do not want online gambling to come to fruition.

As Brazil has a population of some 200m, this is a massive market if laws expand gambling. Most people have smartphones, so mobile gambling would be big business.

Many international casino groups are expressing an interest in setting up in Brazil. The Las Vegas Sands group, for example, would invest up to $8bn in a Rio de Janeiro casino project.

However, Brazil is very traditional as a mainly Catholic nation; many people are against gambling.

Presidential controversies

The new president of Brazil, Jair Bolsonaro, could decide to allow each of the 26 states to make up their own mind on the issue. They could then set their own laws and look after the regulations themselves.

Bolsonaro is a controversial figure, with many comparing him to US president Donald Trump. He won the election easily, gaining 55.2% of the vote.

On a personal level, Bolsonaro does not like gambling, and expressed this view while on his campaign trail. However, Brazil needs to come up with some new revenue drivers.

Expansion of gambling would be one of the easiest ways to generate large revenues fast for the state.