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Brazil – Public hearing on sports betting held in the senate

By - 24 October 2023

In a public hearing last Thursday (19) at the Economic Affairs Commission (CAE), lawmakers and stakeholders discussed the main points that need to be addressed for Brazil’s sports betting bill (PL 3626/2023 ).

According to the senate news agency José Francisco Manssur, special advisor to the Ministry of Finance, laid out the most important points of the government backed initiative. According to Manssur, the most immediate need is to correct the gap that allows these services to operate without paying taxes, which is a “serious tax distortion”.

“The segment has operated in Brazil from 2018 to date without collecting taxes. Nothing is more unfair than essential services, [such as] those who produce food and clothing, and workers collecting their taxes, and this segment collecting nothing. People are gambling: out of ten Brazilians with access to a cell phone, seven have already placed a bet,” he said.

Manssur asked parliamentarians to approve the project because, according to him, only with legislation in force will it be possible to address the problems that betting critics denounce. He spoke of the ministry’s concern such as money laundering loopholes and match-fixing and highlighted cases of gambling addiction.

“The operator has to inform us of the time the person spends in front of their cell phone playing, the maximum loss limit, the pause period. The person who shows signs of addiction must be excluded. All of this can only be achieved with regulation. The wild environment that exists today leaves us unable to act,” he said.

Meanwhile Senator Eduardo Girão, who presided over the hearing, said that the expansion of online betting had generated a “human tragedy”, and drew attention to cases of people who find themselves in financial difficulties.

“Gambling is not a way to get rich. Most people lose money gambling. Don’t believe the advertisements,” he said.

The lack of regulation also affects official lotteries. Bruno Pires Lobato, president of the National Lottery Association (ALSPI) denounced the “unfair competition” that benefits online betting sites.

“If we fail and don’t follow the rules, the next day our lottery machine is turned off. I don’t understand how these sites have been operating for five years without generating taxes, destroying our jobs and taking away foreign currency,” he said.

Ricardo Liáo, president of the Financial Activities Control Council (Coaf), praised several points of the law, in particular the rules that would be required of betting services to verify the identification of users.

“The “know your customer” policy is the main instrument for developing mechanisms and internal controls capable of evaluating financial behaviour. It is from this movement that many issues related to crimes are revealed. It would be very important as an element of money laundering mitigation.”

The control of financial movements was also a point highlighted by Vilson Antonio Romero, president of the National Association of Tax Auditors of Federal Revenue of Brazil (Anfip). He also drew attention to the allocation of taxation, criticizing the smaller share reserved for social security — 2% of revenue, compared to 5% for tourism and more than 6% for sport.

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