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Brazil's Lower House Approves Bill to Regulate Sports Betting and Online Gambling

In a significant move toward regulating the online gambling industry, Brazil's lower house of Parliament passed a bill on September 13. This legislation, which also covers virtual casinos, is now on its way to the Senate for further consideration.

One of the key provisions of the bill is the introduction of an 18% tax on the net revenue generated by online betting companies. This tax is a crucial step in formalizing and regulating the rapidly growing online gambling sector in Brazil. To operate legally in the country, companies will need to obtain a grant, which has been set at BRL30 million (approximately $6 million) and will be valid for a three-year period.

The legislation not only seeks to regulate the industry but also aims to allocate the generated tax revenue strategically. These funds will be distributed among various government departments, including the ministries of tourism, sports, and education, as well as the National Public Security Fund and Social Security. Furthermore, sports organizations and confederations are also poised to benefit from this tax revenue.

Government officials have expressed support for the bill, with Jose Guimaraes, the leader of the lower house, describing it as a crucial step in combatting tax evasion and bolstering the government's finances. He highlighted that the revenue generated would provide more resources for national reconstruction projects.

One notable change in the bill's distribution of funds is the reduction of funds allocated to social security, which has been reduced from 10% to 2%. Meanwhile, the Ministry of Sports will see its share increase from 3% to 4%. The Ministry of Tourism, which previously had no allocation, will now receive 4%, with an additional 1% earmarked for Embratur.

Despite some attempts to postpone the vote, the bill was approved by a symbolic vote in the lower house and will now undergo evaluation by the Senate. Adolfo Viana, the rapporteur of the bill, emphasized that the legislation also permits the operation of online gambling on sites that meet the Ministry of Finance's qualifications, thus expanding the scope of the regulated industry.

The bill's primary objectives include ensuring that betting companies operating in Brazil are registered within the country and adhere to Brazilian legislation. Additionally, it prohibits individuals under the age of eighteen from participating in gambling activities. Moreover, individuals directly involved in sports events, such as coaches, athletes, and referees, are barred from engaging in fixed-odd betting.

The passage of this bill represents a significant step forward for Brazil in regulating and formalizing its online gambling industry, while also addressing important issues related to tax allocation and responsible gambling. As it moves to the Senate for further deliberation, it remains to be seen how this legislation will shape the future of online betting in Brazil.



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