Sports betting market grows 135% in Brazil in 1 year

President of the Instituto Brasileiro Jogo Legal (IJL) and editor at BNLData, Magnho José attributes different factors to the growth of this market. “Brazilians – who already love and support their football team – learned to support and bet due to the wide range of betting platforms and aggressive marketing. Another factor for the explosion in betting was the possibility of payment through PIX”, highlights.

For the expert, the issue of the payment method was the biggest growth inhibitor in this market. Therefore, the addition of the solution also contributed to eliminating this barrier.

“In addition, the online games offered by the platforms also have merit in this growth, especially “instant games” such as Aviator and Mines and casino games”, he explains.

Industry regulation

When analyzing the development of the sports betting market in Brazil, another point that deserves to be highlighted is the debate around regulation. As we already mentioned, the legalization of the sector occurred with the enactment of the law in 2018.

Since then, the market has been waiting for the regulation of the topic, bringing clear rules for the operations of these companies, which today operate here without problems, but are hosted in other countries precisely due to the lack of this regulation. This definition is considered important to the industry for both the safety of players and the integrity of the market.

Due to the need for formalization and also taxation of the sector, the Brazilian government promoted two important moves this year in relation to the topic. In July, it published Provisional Measure (MP) 1,182/2023 and, at the same time, submitted Bill (PL) 3626/23 to parliamentarians. After approval by the Chamber, the PL is now in the Senate for analysis.

For experts, the definition of this topic is necessary to discipline the sports betting market. “The regulations may establish rules for responsible gaming, advertising and marketing, payment methods, certification and compliance, among other benefits”, highlights Magnho José.

Despite the urgency of the matter, the president of the IJL warns about the text approved by the Chamber regarding taxation, which he defined as “outside of reality”.

“With a taxation of 18% of GGR (gross gaming revenue), which added to other taxes will reach more than 30%, the payment of the inspection fee, a grant worth up to $R 30 million for three years and a rate of 30% of the premium value for Income Tax with an exemption of up to R$2,112, it will be difficult to operate and few companies will have a federal license”, he believes.

To contextualize the case, Magnho José explains that, following this scope, the operator will have to work intensely in just three years to make a business viable with reduced product attractiveness, low odds (probabilities of an event happening), taxation above 30% and with promotional limitations. And, in this scenario, you still need to amortize the investments, the grant value and the monthly payment of the inspection fee.

“Brazil may be missing the unique opportunity to have a healthy betting market and a very robust gaming industry due to inadequate regulation”, concludes Magnho José.

In the midst of this context, it is necessary to remember once again that betting on national territory is supported by the law published in 2018. Therefore, betting on sites hosted abroad is legal.

Adequate regulation in the national territory, however, will act to guarantee the integrity of the market, providing more security for players and also generating taxes for parents.