lthough legislation to allow for sports wagering in Brazil has already been approved and signed into law, the guidelines for the implementation of the statute have to be issued via executive order for this activity to finally begin. The deadline set is March, and if met, the market will open by the end of the year.
That is according to Waldir Marques, Subsecretary of Public Policies, Planning, Energy and Lottery (SECAP in Portuguese)— an agency of the Brazilian Ministry of Economy—, who spoke with Valor Econômico, a local financial newspaper owned by mass media group Grupo Globo.
Marques explained that the delay in the draft of the enforcement rules was because the technical team spent 2019 researching and studying fixed-odds sports betting operations overseas and issuing public consultations. Officials aim to create an appealing regulatory framework for leading global companies —based in the U.K., Italy, the U.S., Greece, Portugal, and Denmark— who may enter the newly-regulated Brazilian market through sponsorship deals or as land-based and online operators.
The new executive order, which is currently undergoing an evaluation process by the Office of the Attorney General of the Treasury Department (PGFN in Portuguese), would establish a guarantee worth more than 6 million Brazilian reals (USD 1,464,170).
One of the main criticisms faced by this law has to do with tax burdens: international operators deem welfare charges as an additional tax, claiming they downsize the market's business appeal. Marques said that in Portugal, this rate represents 65% of profits while in Brazil, the tax and welfare charges combined represent 35%, similar to what happens in Greece and France.
Government officials are also working on another executive order that would add changes to horse racing betting and include the so-called 'sweepstake' (a type of gambling in which people pay a small amount of money and choose a particular horse, and the person who chooses the winning horse receives all the money paid by everyone else.
This executive order would also simplify the rules for the operation of jockey clubs, which would reduce costs thanks to the elimination of intermediate parties such as Caixa Econômica Federal —the largest 100% government-owned financial institution in LatAm—.