Brazilian legislators give green light to historic igaming regulation bill

Brazil’s Chamber of Deputies has voted in favour of implementing a federal gaming framework for the first time, bringing the South American country in line with regulatory structures in other markets.

In a vote taking place yesterday (23 February) legislators voted 246 to 202 in support of a basic version of bill 442/91, perhaps the most significant vote in the country’s history since the decision to legalise sports betting in December 2019.

The bill will now pass to a plenary review process in which amendments can be made. If passed in its current guise, the bill will allow Brazil to bring in a federal gambling regulatory framework that is expected to be on the same level as some of the world’s biggest global markets.

Key to the regulatory framework is the creation of a new management software – Audit and Control System (SAC) – that the Ministry of the Economy will use to monitor betting activity and prize payments. The system will use a cashless method to avoid using coins and bills in gaming machines and at tables. Furthermore, players must provide identification documents in the form of either a Brazilian or foreign passport.

Under the bill, land-based casino operators must pay a licence fee of BRL$600,000 (£89,000) per licensed establishment.

Online operators will be subject to the same fee per licensed domain. Bingo operators must pay BRL$20,000 per establishment, while jogo do bicho operators must hand over $20,000 per quarter per licensed entity.

While licensed online gambling has now been permitted, all unlicensed illegal gambling sites will be blocked to Brazilian players. Any prospective online operator must use locally located servers in order to comply with legislation.

Two new bodies will also be established alongside the bill to oversee the new regime and deal with the consequences of its regulation.

The first is SINAJ, which will be a gambling supervisory authority in Brazil consisting of a federal registry, a supervisory body and betting agents. The second will be a service that will help identify and block problem gamblers, the National Register of the Prohibited (RENAPRO).

Proceeds generated from the licensing of operators and taxation will be split several ways and will be used to fund social causes in Brazil. Of this, 16% of it will go to the State Participation Fund (FPE), 16% to the Municipal Participation Fund (FPM), 12% to the tourism institute and 10% to sports programmes in Brazil.

A taxation threshold of 20% will be applied to all player winnings, however that charge will not apply to prizes/winnings that do not reach a net profit of BRL$2,000.

This bill was originally introduced more than 30 years ago, firstly as a jogo do bicho bill but has been amended many times over the years to add more channels and types of gaming.

The legislation passed despite the opposition from Brazilian President Jair Bolsonaro, who has said he would veto any regulation, and deputy Sóstenes Cavalcante who attempted to eliminate the project in its entirety prior to the vote.

Speaking about the legislation, Member of the Chamber of Deputies Felipe Carreras said: “The regulation will allow the state to collect more taxes through the exploitation of games and betting, and will ensure greater resources for the implementation and development of social public policies of the states and municipalities, reinforcing our fiscal federalism.”

Brazil is currently on a separate journey to regulated sports betting operations, however progress towards this market has been severely curtailed by the Covid-19 pandemic and internal wrangling over the effective taxation rate levied against sports betting operators.