Operator lobby group says lack of regulated igaming in Brazil would be “chaos”
The Brazilian Institute of Responsible Gambling suggests dramatic decrease in tax should senators reject igaming regulation in landmark Senate vote
Brazilian operator lobby group, the Brazilian Institute of Responsible Gaming (IBJR), has said “chaos” could ensue should igaming be removed from upcoming regulation of the market.
The group, which includes Entain, Flutter, bet365 and Betway, released a statement ahead of the landmark Senate vote on bill PL 3,626/2023, which is due to take place today, 12 December.
The Senate vote was originally due to take place in late November, but was postponed among concerns raised by senators over the regulation of igaming in addition to sports betting.
While the IBJR said concerns over igaming were “legitimate”, the group added that it was important to explain the impact of removing the vertical from regulation.
According to the lobby group, the removal of igaming relates to three key consequences: a reluctance for foreign operators to launch in Brazil, the growth of the black market, and a downturn in sponsorship and promotion of Brazilian sports.
Furthermore, the IBJR noted that total taxes derived from the sector would fall dramatically, while the total addressable market would fall from BRL15bn to BRL3bn.
The decrease in TAM, the IBJR claimed, would see potential total taxes raised of just BRL360m due to the new 12% GGR tax rate on operators, which fell from 18% in a previous iteration of the bill.
The IBJR said: “Companies based abroad that currently offer sports betting products also have the practice of offering igaming products. This is because 70% of customers who place sports bets are also igaming consumers, which accounts for a relevant part of these companies’ revenues, surpassing, in some cases, the range of 50%.
“In other words, the natural consequence of removing igaming from the text to be considered in the Senate is a drop in channelling.
“The IBJR believes that at least 50% of players would remain underground, playing in unauthorised venues, and, therefore, without generating taxes for the country; in addition to exposure to scams, gambling addiction and other potential problems.
“The IBJR stands with the senators who want Brazilian society to be protected from harmful practices related to gambling and understands that the inclusion of igaming in 3,626/23 is the most efficient and legitimate way to formalise and organise a new sector in Brazilian economy and protect society from criminal practices.”