Brazil's President Lula da Silva has received the decree of sports betting regulation

The text of the Provisional Measure (MP) that seeks to regulate the operation of sports betting in Brazil is ready and was delivered to President Luiz Inácio Lula da Silva on Wednesday night.

The drafting was done by the Ministry of Finance and forwarded through the Civil House, and the text foresees that sportsbooks will have a smaller share of revenues and more obligations to the Government.

The President was also sent the text of a decree for the creation of a working group to monitor the problems of the sector, such as the manipulation of sports results, an issue that, due to a series of recent events, has become a major social concern in the country.

Among the main novelties offered by the text delivered to the Brazilian President, the Ministry of Finance is attributed to the responsibility of supervising the sports betting activity in Brazil. It is determined that the flow of money between the sites and the bettors can only occur through bank accounts of institutions authorized by the Central Bank to operate in the country.

The Ministry may also request technical, economic-financial, and accounting information from the companies, as well as data, documents, and certificates related to the operation.

Regarding tax rates, the MP modified law 13.756/18, which allowed the operation of betting houses in Brazil on some points:

- Significantly decreases the percentage assigned to bookmakers, from 95% to 84%.

- It allocates 1% of the proceeds to the Ministry of Sports, an amount that did not exist in the drafting of the law.

- It allocates 10% to Social Security, an amount that was not foreseen in the previous text.

Additionally, the text maintains the percentage of allocation to clubs and sports entities already provided for in the law, which represents 1.63%, despite expectations on the part of the Brazilian Football Confederation (CBF) to increase this percentage to 4% on gross revenues, but the proposal, which was submitted by the entity and then withdrawn, failed to take hold.

In an analysis of the parallels and differences between the text of the 2018 Law and the regulation proposed by this Provisional Measure, the following stand out:

Law of 2018

- 95% for the betting lottery operator.

- 2.55% for the National Public Security Force (FNSP).

- 1.63% for sports entities.

- 0.82% for public schools.

Provisional Measure of 2023

- 84% for the operator of the betting lottery

- 10% for Social Security

- 2.55% to the National Public Security Force (FNSP)

- 1.63% for sports entities

- 1% to the Ministry of Sports

- 0.82% for public schools

The measure also brings novelties regarding the advertising of companies and its limitations at the national level, as it prohibits the advertisements of unlicensed sportsbooks.

Furthermore, the Ministry of Finance prohibits certain persons from betting, including managers and employees of the sportsbooks themselves, minors under 18 years of age, public officials, and persons linked to sports entities, such as managers, coaches, and athletes, described in the text as persons who may have some influence on the outcome of the event itself.

It is worth mentioning that this week, the Goiás Justice accepted the complaint filed by the Public Prosecutor's Office against 16 people investigated in the Penalidade Máxima II operation, among them seven soccer players. The investigation analyzes indications of manipulation of results and adds controversy to an issue that is currently a complex one in public opinion.

Prohibition of buying rights

The text of the measure also establishes impediments for betting companies to operate in the market for the purchase of television rights, internet, or any other type of retransmission of sporting events or to finance these purchases.

This is in addition to the fact that President Lula also received the draft of a decree to discuss actions to fight against the manipulation of results, and if approved, three representatives from the Ministry of Sports and three from the Ministry of Justice will be part of the working group.

Representatives from the Order of Attorneys (OAB), the Brazilian Football Confederation (COB), the Brazilian Olympic Committee (COB), the Brazilian Paralympic Committee (CPB), the Brazilian Institute of Sports Law (IBDD), the National Association of Games and Lotteries (ANJL), the Brazilian Institute of Responsible Gaming (IBJR), the Brazilian Association of Sports Betting (ABAESP), the Brazilian Association for the Defense of Sports Integrity (ABRADIE), SIGA Latin America and the International Betting Integrity Association (IBIA) will also be part of the working group as guests, which means without decision-making power.

So far, no entity representing athletes is expected to participate, and the group is scheduled to meet every two weeks to discuss any and all issues.

From the moment the Provisional Measure is published by the Government (which has not yet happened in the case of the betting regulation), it is valid for 60 days, extendable for another 60 days. During this period, the text must be analyzed by the members of the House and the Senate, which may introduce changes in the wording and sign it into law. Further news on this matter is expected in the next few days.