Brazil: Online gaming regulation should be a priority

A good example of how bettors can be deceived in a deregulated market is the Blaze platform, responsible for the popular “little plane game”, the subject of a Fantástico report last Sunday. Without headquarters or representation in Brazil, it gained market share after being incensed by advertisements starring celebrities and digital influencers promising quick and easy money. In practice, gambling is illegal in the country.

It is necessary to recognize that Brazil has been moving in the right direction in regulation. The Senate approved a Bill (PL) originating from the Chamber regulating sports betting, offered by companies known as bets. The government says it has identified at least 300 betting sites in Brazil, whose annual revenue is valued at R$100 billion. Regulating them is a necessity not only because they do not collect taxes. The very credibility of football was already called into question when the Public Ministry of Goiás discovered a scheme in which gangs paid bribes to players to make money from bets.

The text approved by the Senate provides for taxation of 12% on the income from bets and 15% on the prize for individuals. It also institutes an initial grant of R$30 million, paid by companies. In a preliminary estimate, the Minister of Finance, Fernando Haddad, expects to raise at least R$2 billion in 2024. This amount is expected to grow.

To prevent fraud, the PL requires technical security requirements and certified infrastructure from bets, in addition to integration with international sports monitoring bodies. An amendment by Senator Tereza Cristina (PP-MS) prohibits the installation of equipment in physical establishments to prevent the proliferation of slot machines and clandestine casinos.

In the vote, an amendment by senator Carlos Portinho (PL-RJ) was also accepted, removing authorization for “virtual casinos” from the text. In practice, this left a vacuum precisely where fraudulent businesses like Blaze flourish.

If the PL is approved in the Chamber in the form it came out of the Senate, the sports betting market will have sensible rules, but games of chance like those offered by Blaze will continue to be in regulatory limbo. There is no point in the effort to regulate betting if the law does not have mechanisms capable of preventing fraud with other types of online betting.

Therefore, the Chamber should return the text to its previous form. It is not about legalizing gambling, but about creating adequate legal instruments to punish fraudulent websites and a robust inspection structure. It will be necessary to ensure that companies operating legally collect taxes and comply with the rules. And that the others are punished and prevented from operating in Brazil.