Brazilian gambling expert Magnho José analyzes key points of sports betting bill approved by Senate committee

After the approval of Bill 3.626/2023, which regulates Brazilian sports betting, by the Senate's Economic Affairs Committee (CAE), BNLData, Yogonet's official partner, reported on the work of Senator Angelo Coronel (PSD-BA), the bill's rapporteur.

Magnho José, editor of BNLData and president of the Brazilian Institute of Legal Gaming (IBJL), explained in his analysis the importance of the adjustments and improvements to the text made by Coronel, giving him credit for the bill's approval.

According to Magnho, the parliamentarian spoke with the president of the Chamber, Representative Arthur Lira; with the rapporteur of the bill in the Chamber, Representative Adolfo Viana (PSDB-BA); with the Ministry of Finance, as well as with businessmen in the sector (mainly Brazilian) and with several senators in favor and against in order to build a balanced text that would suit all stakeholders.

Senator Angelo Coronel 

"Most senators saw the need to regularize gambling. We are not inventing gambling. Gambling already exists, but it is illegal. After this approval, taxes will be collected. The Brazilian population is the winner," said rapporteur Angelo Coronel during the CAE meeting.

In BNLData's analysis, it becomes clear the importance of having changed the concept that the gambling sector is a customs issue, to align with the main economies of the world that treat gambling as an economic activity.

"Coronel also wisely defined that the best thing for the activity is legalization and regulation to create public policies that generate benefits for the state and society," Magnho José added.

"If they cause some kind of damage, we need to build mechanisms to mitigate that damage. If they bring benefits, we need to distribute them in the most effective way so that society as a whole benefits," Angelo Coronel concluded in his presentation at the CAE.

Key points of Bill 3.626/2023

• For companies, taxation will be 12% of gross gaming revenues.
• The bettor will be taxed 15% on the value of prizes exceeding BRL 2,112 ($430).
• Bets on virtual events will remain unchanged.
• Fixed concession fee of up to BRL 30 million ($6 million) for a period of five years, with the right to three trademarks per authorization.
• The right of companies to advertise in stadiums and media is preserved, following the rules already defined in the Chamber's text.
• Operators must have at least one Brazilian partner holding at least 20% of the company's capital in Brazil.
• The Ministry of Finance will set a term of more than six months to adapt to the rules.
• Holders of Caixa Econômica Federal and lottery licenses may be accredited to operate fixed odds betting.
• Prohibition of betting on youth sports events with underage athletes.
• The betting operator must adopt identification procedures to verify the validity of the bettor's identity, requiring the use of facial recognition technology.
• Unclaimed winnings expire 90 days from the date the outcome of the event being wagered on is announced. Unclaimed winnings will go 50% to the Student Financing Fund (Fies) and 50% to the National Fund for Public Catastrophes, Protection and Civil Defense (Funcap).
• Athletes, managers, coaches, referees, and any other professional with influence on the outcome of matches are prohibited from placing bets, public agents involved in inspection activities, employees with access to the computer systems of betting companies, persons diagnosed with pathological gambling, and minors.

The next stages of the project

After its approval in the CAE, the bill will be voted on in the full Senate, on a date to be set by President Rodrigo Pacheco (probably next Tuesday, November 28).

Due to the changes introduced by the senators, the text will have to return to the Chamber of Deputies for a new vote, and the deputies will have to validate or annul the changes made by the senators. It will then be sent to President Luiz Inácio Lula da Silva (PT) for approval.

For more information on the processing and content of Bill 3.626/23, click here.