Brazil Nearing Historic Sports Betting Legislation

• Following Luiz Inácio Lula da Silva’s election victory, Brazil began spending on social programs and are looking to tax online sports gambling to recoup these losses.
• Early reports estimate that the move to legalize and regulate online sports betting would net between two and six billion reais ($386K-$1.12M) in tax revenue.
• Brazilian Globo News Network found that one in six Brazilian bettors use gambling as their main source of income

BRASILIA – Sports legalization in Brazil looks to finally be coming after the Minister of Finance Fernando Haddad is preparing to have a bill reviewed through committee. Due to social program spending and the raising of the minimum tax rate hampering overall tax revenue, the legalization and taxation of online sports betting in Brazil is expected to offset the over $616 million lost.

Former Brazilian President Jair Bolsonaro had the opportunity to make a similar legalization move in 2022 but never signed off on the regulations, leaving the bill to die on his desk. Brazil has one of the largest untapped grey-area markets for betting and the creation of a legal sports betting industry should work wonders for their tax revenue.

Why Brazil is a Prime Area to Legalize

Many early estimates pin Brazil as one of the main betting markets in the world due to their incredibly large population and the prevalence of sports betting among Brazilians. In 2020, the Brazilian gambling market was estimated to be worth around $1.24 million dollars and can be expected to balloon following legalization.

This immense market is one of the prime reasons that Haddad and Lula da Silva have pledged to make legalization one of their top priorities in 2023. Haddad has also stated that the regulation specifically targets sportsbooks that do not pay any taxes to the government.

The growth of these markets is not expected to slow down either, nearly tripling between 2018-2020. Recent surveys even found that over half of bettors in the country started during the COVID-19 pandemic.

The Ministry of Finance also iterated that the specific bill on the docket only seeks to legalize and regulate the sports betting industry with the massively popular online casino betting on the radar for a later date.

The bill further aims to regulate and leverage punishments for fixing matches, which was a particularly big scandal is 2022 when Serie B games were found to have attempts at fixing the outcome by criminal groups.

It is also interesting to see some of the information on how the aforementioned surveyed bettors in Brazil view the concept as a whole, with 60% viewing it as a form of entertainment, 52% as an income source and 13% saying it was a way to socialize with friends.

The most bet on sports by Brazilians should not come as too much of a surprise with 81% of respondents listing soccer, 33% for basketball, and 29% for esports. The last of which comes as a result of Counter Strike: Global Offensive being one of the most popular video games in the region.

Thus, with by far the largest population in Latin America, an already massively popular sports betting market, and support from both the Ministry of Finance as well as the President, Brazil sports betting looks to be in perfect position to bring the country millions of dollars in tax revenue.

News tags: Brazil | Brazil Ministry of Finance | Brazilian Globo News Network | Counter-Strike: Global Offensive | COVID-19 | Fernando Haddad | Jair Bolsonaro | Luiz Inácio Lula da Silva | Serie B