After the government issued a provisional measure on sports betting a few years ago, the subject's popularity surged in Brazil amid constant advertising on television and other media. During that period, the public authorities began to "scrutinize" the betting segment more closely, requiring all websites in the sector to adapt to new rules.
The most recent law regulating sports betting in Brazil is Law 14,790/23. It establishes rules, rights, and duties for both operators and sports betting customers, whether bets are placed in person or online. The law also defines how betting companies must obtain authorization to operate, limits on advertising, and tax rules for betting proceeds.
Law 14,790/23 and Its Changes to the Betting Market
As mentioned earlier, Law 14,790/23 brings considerable changes for bettors and operators of gaming websites. The most important fall within the following areas:
Taxation
Under current legislation, betting companies and bettors must pay the relevant taxes. Players who win more than R$2,112.00 will pay 30% of that amount, the same rate applied to lottery prizes. Companies will pay an 18% rate on Gross Gaming Revenue (GGR), which is net revenue after deducting prizes and other taxes. In addition, betting platforms will have to pay other taxes such as PIS, Cofins, income tax, CSLL, and ISS.
Law 14,790/2023 also provides guidelines on how the state must distribute the 18% tax rate paid by betting companies. According to the legal provision, the distribution must be as follows: 10% for education, 13.60% for public safety, 36% for sports, 10% for social security, 1% for the Ministry of Health, 0.50% for civil society organizations such as the Red Cross, 0.50% for the Federal Police Fund (Funapol), and 0.40% for the Brazilian Agency for Industrial Development (ABDI).
Oversight
According to the law, the Ministry of Finance will be responsible for creating a department to manage betting companies in Brazil. This department will review the documentation of betting companies and websites and decide whether to approve them. Companies will also need to purchase a license to operate. In addition, the department will be responsible for monitoring betting volume and revenue, ensuring more effective control over the sector.
Legality and Stricter Advertising Guidelines
According to Article 17of the new law, only companies authorized by the department may accept bets on official sporting events organized by federations, leagues, or confederations. Unauthorized companies will be operating illegally and may not advertise. In addition, platforms that violate the law may be fined up to 20% of their revenue, capped at R$2 billion per violation, depending on its severity.
Preventing Fraud and Money Laundering
Betting companies must send information about bettors to the Council for Financial Activities Control (Coaf) to prevent money laundering and terrorist financing. The law requires rigorous measures to combat money laundering, fraud, and match-fixing. Although the regulation does not yet provide a specific solution, companies must create effective control and monitoring systems to reduce these risks.
Entry of New Players
Not everyone can take part in sports betting. The law prohibits the participation of people under 18, public officials who oversee the federal sector, people with access to lottery and fixed-odds betting systems, individuals who can influence game results, such as coaches, referees, and athletes, and people listed in credit-protection registries. There is also a sensitive and important issue addressed by the regulation. People diagnosed with gambling disorder (betting addiction) whose addiction has been proven are prohibited by Law 14,790/23 from placing bets of any kind.
The Benefits the New Law Brings to the Betting Segment and the Country
The regulation of sports betting in Brazil is not merely a legal change, but also a transformation that offers major benefits to bettors and society as a whole. The main advantage is the creation of a safer and more transparent environment for players, with the following key points:
Legal certainty: Sports betting websites and platforms will be able to operate in the country without the risk of sanctions for being companies based abroad. In this way, the new law provides guarantees and establishes more solid foundations for operating in Brazil's sports betting industry.
Potential government revenue: With the activity fully regulated, the Brazilian state stands to gain a new source of revenue. Taxation of the amounts transacted by players, combined with the amount charged to betting companies, could generate a significant sum for public coffers.
Potential reduction in the risk of crime and fraud: The creation of the new law introduced specific provisions to prevent betting fraud. Based on Article 45, the provision aims to impose strict measures against any type of fraud committed in games.
