IBJR: Brazil’s current regulations will capture just 25%-30% of the market
Lobby group sounds the alarm over black market leakage as bill heads back to lower house following Senate’s decision to cut vertical from regulations
The Brazilian Institute of Responsible Gaming (IBJR) has implored the Chamber of Deputies, or lower house, to put igaming back into the regulations ahead of a landmark vote this week.
The Brazilian Senate rejected the addition of online games of chances on 12 December in Bill PL 3,626/2023 which will provided a regulated framework for sports betting in South America’s largest nation.
Games of chance were rejected by senators among concerns relating to the proliferation of online casinos in the market, a decision that has been met with frustration by industry stakeholders, including the IBJR which has suggested igaming accounts for 70% of online operators’ revenue.
The bill is set to return to the Chamber of Deputies for final approval this week, before being sent to President Luiz Inácio Lula da Silva for his signature.
The IBJR has since called on the lower house to “rectify the Senate’s mistaken decision” and stated that not regulating igaming would see just 25% to 30% of the Brazilian market “regulated and monitored”.
The lobby group, which includes international operators Flutter Entertainment, bet365 and Entain, added that only allowing one vertical would be harmful to Brazil, claiming that for every BRL10 (£1.60) spent by gamblers in Brazil, BRL7 will be done so in the black market.
The IBJR commented: “Regulating a single vertical and leaving the other without support, regulation and supervision, drastically reduces the size of the formal market and consequently, the level of interest on the part of large global players and potential national investors.
“The IBJR understands the concern presented by senators when removing the online casino and other electronic games from the text to be considered by federal deputies.
“However, we believe that based on the international experience of the associated companies, which together operate in more than 40 countries, comprehensive regulation is the only way to create a safe environment for this new sector of the national economy to develop in a sustainable manner, combating today’s growing informality.
“We hope that the return of the project to the Chamber of Deputies will allow the final text to include the two modalities that make up the igaming sector in Brazil and that the sector can integrate into the Brazilian economy.”
Last week, the IBJR warned of “chaos” should igaming be removed from Brazil’s regulated market and claimed that 50% of players would remain betting with unlicensed operators.
As they stand, Brazil’s regulations would see licences cost BRL30m for five years and operators taxed at 12% of gross gaming revenue (GGR). There would also be a much-criticised 15% tax on players’ winnings, although this has been halved since the legislation was first submitted.