n accordance with information leaked out and still unofficial, there would be no limits to the number of licenses allowed to operate in the Brazilian market, which shows the Ministry of Economy is looking to create a flexible market with big growth opportunities for operators.
Pursuant to the preliminary regulations, operators will also be required to pay a one-time license fee of R$3 million (almost USD 740,000). The authorization would last nine years and such period could be renewed by paying a readjusted fee.
Moreover, each operator would have to make different monthly payments in accordance with the operating modality chosen. Those operating exclusively at retail locations would have to pay R$ 20,000 (USD 4,920), while the fee for online operators would be R$ 30,000 (USD 7,380). Companies operating under both modalities would have to pay R$ 45,000 a month (USD 11,100).
The draft document also sets out that licensees shall have a mandatory financial reserve amounting to no less than R$ 6 million (USD 1.48 million), and, they would have to pay an annual tax rate of 1% on turnover.
The results of the month-long consultation suggested the public prefers a tax scheme which is calculated on the basis of Gross Gaming Revenue (GGR) but Ministry of Economy officials estimate that, on average, 1% on turnover is equal to 6% on GGR.
As regards measures imposed on illegal operators, the Ministry of Economy’s team is evaluating possible amendments to Brazil’s Criminal law to include tougher sentences, but that would require the Congress’ approval. The Ministry’s proposal includes one-to-five-year imprisonment sentences and fines for those operating illegal lotteries, and two-to-eight-year imprisonment sentences and fines for those who engage in match-fixing.