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Ministry of Finance calls for coordination over state sports betting regulations in Brazil

By - 22 April 2024

During the 192nd Ordinary Meeting of the National Council of Fiscal Policy (Confaz), held in Fortaleza, Ceará, Dario Durigan, Executive Secretary of the Ministry of Finance, proposed the creation of a new Working Group within the council to discuss state regulations for sports betting.

According to a Confaz press release:

 “Coordination among the federal entities is critical not only to ensure the integrity and security of sports betting but also to prevent potential erosion of state revenues.

“The establishment of a fragmented regulatory environment could lead to harmful competition among states, akin to the well-known “tax war,” negatively impacting revenue collection and market efficiency.

“The federal dialogue proposed by the Ministry of Finance, through the establishment of a Working Group, represents a significant step towards achieving consistent and harmonized regulation of sports betting at the state level.

“With the enactment of Law 14,790/2023, which establishes the general guidelines for sports betting, cooperation among the 26 federal units and the Federal District has become essential to establish regulations that ensure the efficiency and safety of the sports betting market across the entire country and, especially, for the users.”

The announcement comes amidst growing controversy over the granting of sports betting licenses on a state level. Last week Loterj announced that it planned to grant more sports betting licenses.

On Friday (5th April) Loterj decided not to respond to a request from the Ministry of Finance regarding the issue of offering sports betting outside of state borders. According to local press the issue could as a result end up in Brazil’s Supreme Court (STF).

Loterj has authorized four online betting platforms to operate across Brazil so far, sparking controversy within the Ministry of Finance, which according to newspaper “Folha de S.Paulo” is reportedly considering legal action against the decision. Crucially Rio de Janeiro has not imposed any geographical restrictions on these licensed sites, enabling them to operate nationwide.

In February local press reported that while the Federal Government has yet to finalize regulations for the online betting market, Rio de Janeiro and Paraná were attempting to take pre-emptive measures by adopting initiatives aimed at increasing revenue and attracting betting companies to their states. These measures include setting values for licensing fees and applying revenue percentages lower than those stipulated in federal legislation.

The National Council of Fiscal Policy (Confaz) in Brazil is a collegiate body that brings together the Secretaries of Finance or Taxation of the states and the Federal District. Its main purpose is to promote financial and fiscal policies among the federative units, aiming to establish agreements for tax harmonization and cooperation in the management of tax and fiscal matters throughout the country.

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