Law No. 13,756/2018 was published yesterday. Originally intended solely to redirect the proceeds of government-run lotteries more heavily to public security, the new law also creates a new form of authorized wagering in Brazil: fixed-odds sports betting (although the law depicts the same as a form of lottery).
In this form of wagering, the punter wins if he/she correctly predicts the outcome of real world sporting events. Upon placing the wager, the player knows what amounts he/she stands to win.
The game will be operated by private entities upon authorization or concession by the Ministry of Finance, which is also responsible for the regulation and supervision of the activity. A new assessment fee has been created, which will be directed to the division of the Ministry of Finance in charge of carrying out such activity.
The law provides for land-based and online provision of services. Land-based operators are subject to sector specific taxes and fees of 6% over the gaming revenue, an obligation to distribute at least 80% of the gaming revenue as prizes and income tax over prizes and a limitation of 14% of the gaming revenue destined to the operator. Meanwhile, online providers are subject to taxes and fees of 3% over the gaming revenue, an obligation to distribute at least 89% of the gaming revenue as prizes and income tax over prizes and a limitation of 8% of the gaming revenue destined to the operator.
The Ministry of Finance has a two-year deadline to issue its regulations. Notwithstanding the new law creates the possibility to extend this deadline for an additional two-year period, the Ministry of Finance has already started studying the models adopted by U.S. regulators. We must now wait to see the priority that will be given to the matter by President-elect Bolsonaro and his team.