Online gambling will finally be regulated in Brazil in 2024 after the parliament of deputies voted to allow it.

After last week's Senate plenary approved Bill 3,626/2023 on Tuesday, December 12th, the vote took place last evening, December 21st.

After the parliament of deputies gives its approval to the bill, it will go to President Luiz Inacio Lula da Silva's office for final approval.

The last step in Brazil's gambling regulation
Despite the chamber of deputies' September approval of the measure to regulate online gambling in Brazil, they had to vote again last week to agree on the senate's revisions to the law.

The Senate Plenum has approved Bill 3,626/23. A week ago
On December 12th, Senator Angelo Coronel introduced the measure to the Senate. The bill had been initially approved three weeks ago by Brazil's Economic Affairs' Commission, and it included the most recent round of modifications.

In spite of fierce opposition, the measure made it to the Senate for a vote on three major points.

The senate also decided to ban virtual games and sports betting terminals, in addition to igaming. An additional proposal that would have outlawed stadium advertising for sports betting was also rejected.

Furthermore, all tax proposals put out by the Economic Affairs Commission on November 22nd were also approved.

On November 22nd, the Economic Affairs Commission approved all of the tax recommendations.
This solidifies the 12% cap on GGR (gross gaming revenue), down from 18%. There have been changes to the way wins are taxed as well.

Net profits from bettors will be subject to a 15% tax rate, but only once every year. There is no exception because this amount is higher than BRL2,112 (£339, €394, $425).

A one-time payment of up to BRL30 million will also be necessary for licensees. Doing so will allow them to run up to five distinct brands.

When it came back to Brazil's gambling regulations, how did igaming fit in?
Although igaming was removed from the bill by the senate yesterday, the house of deputies still has the power to reverse the omission.

The chief partner and founder of the Brazilian law company Montgomery & Associados, Neil Montgomery, predicted that the senate would be opposed to igaming in an interview he gave to iGB earlier this month.

The Evangelical Parliamentary Front was a prime example of this. "We are taking another step forward to involve Brazilian citizens in an unprecedented situation," Evangelical Party leader Deputy Eli Borges said during yesterday's voting.

The discussion
Arthur Lira, president of the Chamber, responded to Borges' criticism by noting that the deputies had already passed the measure in September and that the senate had already compromised on several parts of the law.

Lira brought attention to the fact that delaying the vote will not stop online games, but will actually promote anarchy and money laundering.

Will games be extinguished if we just refuse to vote on the rules? When will people quit participating, betting, and supporting various sporting events and tournaments? "No," Lira rejected.

It was brought to his attention that there are currently gaming platforms that require regulation. "We are not trying to increase or decrease here; rather, we are attempting to regulate and give seriousness [to the sector] in order to avoid, for instance, money laundering," he stated.

Physical gaming and casinos have been completely removed from the text per the request of the Evangelical Parliamentary Front.

However, it was anticipated that tax revenue would fall short of expectations due to the exclusion of online gambling.

Fiscal plans and taxation
The loss from igaming might bring the total down to less than half of the initial goal of BRL1.6bn. An estimate of BRL700 million was made. The original goal, which was to collect taxes and licence fees, was drastically different from that sum.

Neil Montgomery perceived approbation as practically certain in many respects. This is because "the federal government is pushing for the approval to contribute to helping achieve zero fiscal deficit next year." When Montgomery says "zero deficit target in 2024," he's referring to Brazil's official fiscal goal.

With the president's signature on the existing measure, 36% of the tax would go towards sports and 28% towards tourism. Funding for public safety programs will receive 14% of the total, while education and social security would each receive 10%.

It is also anticipated that the inspection fees will be adjusted. The amount of premium paid will no longer be the basis for its calculation. Rather, it will rely on GGR levels that are lower.

In addition, the Brazilian ministry of finance must approve any aspiring operators before they can open for business in the country.

A Brazilian partner holding at least 20% of the company's capital in Brazil is required for operators to qualify for a licence. Also, they need to make sure they have the right cybersecurity measures in place.

The measure further specifies that operators must establish identification procedures. One possible approach is the use of facial recognition technologies.

Brazilian law prohibits the advertising of unlicensed operators. Furthermore, B2C enterprises without the proper licence will not be able to receive technology from B2B partners. We will also be banning bonuses.

What led to the current state of gambling regulation?  
We at iGB have covered the lengthy and winding road that Brazil has taken to legalise sports betting and casinos thoroughly.

The last leg of the trip began in May with the announcement of PM 1,182 for sports betting by the Brazilian government.

May 2023 marked the beginning of the final leg of the journey, which Da Silva authorised the prime minister to undertake. After that, in July, the president officially signed it into law.

People did not take kindly to the PM at first. The primary areas of disagreement are around the 18% tax rate, limitations on advertising, and unclear regulations around payments.

Bill 3,626/2023, which amended PM 1,182, was subsequently introduced.

Online casinos were the most significant addition. In September, the chamber of deputies accepted this, maintaining the tax rate at 18%.