Brazilian President Jair Bolsonaro did not sign a decree that would have regulated sports betting in the country before the mandatory deadline of December 12. His lack of attention on the matter, according to information provided by Brazilian media outlet Veja, could lead to criminal charges against him.
Brazil has a solid sports betting market that reportedly handles turnover of hundreds of millions of dollars a year. However, the government receives almost no financial benefits.
That could have changed if Bolsonaro had signed off on the legislation as lawmakers had stipulated. However, the odds of prosecutors going after him are slim.
Bolsonaro Fails Brazil
Legislation that would have established the regulations, including tax obligations, for sports betting in Brazil arrived four years ago, with a proviso that the regulations would be established within two years. That didn’t happen, so lawmakers took advantage of language in the bill that allowed for a two-year extension.
That pushed the deadline out to December 12, and lawmakers had created the framework earlier this year. The only thing left was for Bolsonaro to sign off on them.
In preparation for his signature, bookmakers began taking over this year. They launched advertisements, set up sponsorships of teams and leagues and hired local athletes as ambassadors. Throughout 2022, as many as 500 operators infiltrated the market.
However, they’re now in a tough situation. The 2018 law stated that for a sports betting company to have Brazilian operations, it would need to obtain a license from the Ministry of Economy. Otherwise, it could be punished by the Criminal Misdemeanor Act.
The legislation was supposed to set the boundaries and requirements. Although Bolsonaro has repeatedly voiced his opposition to gambling expansion, almost everyone expected him to sign the bill since it had received so much support.
The decree, as well as a complementary provisional measure, had the approval of a number of groups, including the Civil House and the Ministry of Economy. Bolsonaro first postponed the decision for fear of losing evangelical votes ahead of the country’s elections. After he lost to Luiz Inácio Lula da Silva, his inaction could have been just out of spite.
As a result, the outgoing president’s approach to the subject could be tantamount to dereliction of duty. Finding a prosecutor willing to challenge the man who wields the most political power in the country, however, is an impossible feat.
The Wild West of Brazilian Sports Betting
Without regulation, companies operate from outside the country, mostly offshore. Therefore, at least in theory, the money invested by the bettors leaves the country.
This also means that the activity is not supervised by Brazilian agencies. As a result, legal problems cannot go to the Brazilian courts and gaming companies don’t have to pay taxes to the country.
If regulated, according to some analysts, sports betting could account for as much as one-third of all tax revenue. This is in addition to the creation of new jobs and the generation of other revenue.
The license itself would have cost each operator BRL 25 million (US$4.7 million). Assuming just half of the 500 operators continued, that would have been US$1.17 billion in easy money.
Fortunately, there’s a strong chance the subject will be reignited in the future. Even if it involves some legal bureaucracy, the expectation is that regulated sports betting will arrive through the issuance of a new decree, which could come as soon as the beginning of the term of president-elect Lula in January.
Bolsonaro Also Blocks Lotteries
Three months after the creation of the Health and Tourism lotteries, there are no prospects for their regulation. Congress decided to maintain Bolsonaro’s veto of the article that determined a period of 30 days for the Ministry of Economy to create the regulations.
As a result, the lack of a decision could allow Caixa Econômica Federal to operate the two new lotteries. The language of the bill also set up rules for certain sports betting operations. These could now also fall under the domain of the state-owned banking institution and lottery operator.
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