New federal law allows sports bets in Brazil

Brazil has enacted a law about sports betting, which was published on December 13, 2018. Sport bets were already present in Brazilians routine, gaining prominence in the FIFA World Cup and football championships. However, this presence was considered marginal in the national territory, since it was not regulated and collided with the image of gambling, which is illegal since Decree Law No. 9,215/1946. Therefore, sports betting has the potential to consolidate as a relevant – and lawful – practice in Brazil.

Sports betting is a multi-billion-dollar market around the globe. The new flexible Brazilian law is aligned with the favorable approach related to such market in the United States and England.

The Law describes this lottery mode as a system of bets related to real sports events, which sets forth how much the player can win - at the moment of the bet - in case of a positive outcome.

Fixed match betting shall be authorized by the Ministry of Finance. The law allows online and offline betting. The Ministry of Finance will have 2 (two) years to edit a regulation about this subject (the period can be postponed for additional 2-year period).

According to the new law, which is already in force, the following amount will be reverted to payment of premiums and income tax: (i) 80% (eighty percent) in case of offline market; and (ii) 89% (eighty-nine percent) in online sports betting. Among other provisions, there will also be the collection of monthly Inspection Fee, according to the prizes offered, for the purpose of commercial exploitation.

In light of the foregoing, the Brazilian government seeks to legalize an already recurrent practice, aiming its expansion and tax collection. It can be also noticed that the law reinforces the importance of compliance, pointing out that the actions of communication, advertising and marketing should follow the best practices of corporate social responsibility. Finally, it defines a maximum period of ninety (90) days for players to claim their prizes counted from the first disclosure of the result object of the bet.

The new law can be accessed here (in Portuguese).

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