Legal Sports Betting in Brazil Looking to Cross Finish Line
Brazil has been able to put on some big shoes and take a large step forward, launching sports betting. This is due to President Jair Bolsonaro signing a decree that is related to the privatization.
The move is coming off the heels of related legislation that was passed way back in 2018. More specifically, Decree 10,467 states that the National Bank for Economic and Social Development (BNDES) will be the ones managing the sports betting privatization in addition to the Ministry of Economy has their hands in it.
The BNDES’ main goal is to provide the “execution of the privatization process.” On the other side, the Ministry will be helping develop, introduce, and overlook sports betting legislation as a whole. Both parties are expected to make this deal work as smooth as possible.
Part of the decree will have the inclusion of sports betting in Brazil’s Investment Partnership Program (PPI). This will allow private sports books to open their doors to players in the country and provide a much-needed service.
In addition to the process, there are a total of 158 different projects and 13 separate policies geared toward fulfilling the privatizations. Special Secretary Martha Seillier claims it is part of their process. However, no timeline has specifically been given.
Potential Untapped Market
With a population of over 200 million and a massive love for football, one has to wonder how quickly the benefits of sports betting will be for the market. Since they first introduced a similar bill in 2018, they have been a curious case in the industry for some time now.
An example of the market being prepared is with Swedish operator Betsson making moves in 2019. They bought a 75 percent stake in local operator Suaposta. This is just icing on the cake since their football division, Brasileirão Série A has 14 of its 20 teams sponsored by sportsbooks.
You can find the Betsson deal here:
It is estimated that there are already nearly 450 websites that have been specializing in sports betting. In this case, the move to sports betting is ready to go once the legal side of things is processed.
Potential High Tax Market
Brazil had been preparing to make adjustments to regulations for online sports betting without having to reduce the headlining tax rate. This would mean changing it from a 3 percent turnover rate to a very attractive 1 percent.
However, officials had been back and forth on this since the bill that was passed in late December of 2019. The details will be further ironed out once the sports betting side gets a release date.
This current update of legalizing sports betting Brazil has brought a lot to think about. These sports betting concessions, which are included in the asset privatization plan, could make the process turn in a direction where Congress could look into a turnover of taxes.
These changes would make the market much more appealing and get the ball rolling for investors and customers alike to benefit from the transactions. These studies have helped shape the concession models with a regulatory regime and fees.
Again, there is not a timetable for when this process will occur. There have also been talks about limiting the amount of operators for online and retail sports betting. So big time players such as Betsson would benefit from the smaller competition by getting in the game early like they did.
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