The betting sector has the potential to be a significant source of revenue and development, but the success of this initiative will depend on the government's ability to rigorously monitor activities and the collaboration of companies to maintain a safe and transparent business environment. This is the concept of the opinion article by lawyer and master in Economic Criminal Law Livelton Lopes for Fausto Macedo's blog at Estadão.
The enactment of Law No. 14.790, dated September 11, 2023, represents a crucial milestone for the sports betting market in Brazil. Since Law No. 13.756/2018 legalized fixed-odds betting, the sector has experienced remarkable growth, with the entry of several companies that are popularly known as bets. These online platforms allow users to place bets on sports events, ranging from football to less popular sports, with fixed odds set by the companies themselves.
Despite the rapid growth, the sector lacked detailed regulation and effective control to prevent its use for illicit practices, such as money laundering.
The new legislation, sanctioned by the federal government, aims precisely to fill these gaps, establishing strict criteria for the operation of betting platforms and imposing a set of rules aimed at oversight. This text will analyze how this regulation responds to the challenges posed by this rising market.
Law No. 14.790/2023 essentially complements Law No. 13.756/2018, which initially legalized fixed-odds sports betting in Brazil. Although the 2018 legislation enabled the sector's operation, it was the new law that brought more detailed regulation, addressing the fiscal and operational obligations of the involved companies.
Starting in 2025, betting companies, or Bets, will need to obtain licenses granted by the Ministry of Finance, which may cost up to R$ 30 million, with a validity of five years.
Moreover, the law provides for taxation on the profit from bets, establishing an Income Tax of 15% on the net prizes of bettors. Part of the revenue collected will be allocated to areas of public interest, such as social security, education, sports, tourism, and public safety.
The new legislation also introduced significant control mechanisms. Betting companies must be auditable, ensuring that the Ministry of Finance has access to systems that allow continuous monitoring. This aims to ensure the transparency of operations, making it difficult to use these platforms for money laundering. Any atypical financial movement by bettors must be monitored and reported.
Unlike other countries that accept cryptocurrencies, in Brazil, betting payments must be made exclusively through formal means, such as bank transfers, boletos, and PIX, thus facilitating the oversight of transactions. Additionally, the legislation prohibits the payment of prizes anonymously or through institutions not under the supervision of the Central Bank.
Bets should not be seen as "illicit businesses," but rather as agents that can collaborate to create a regulated and safe market. The new legislation seeks, in fact, to legitimize their operation within clear and demanding rules. Companies wishing to operate in Brazil will have to adopt effective measures to prevent fraud and manipulation, as well as comply rigorously with all legal requirements to ensure the integrity of their activities.
The expectation is that, after the adjustments scheduled until December 31, 2024, the market will be fully operational in 2025, creating a safer business environment both for bettors and for companies.
Despite the advances, combating money laundering in the betting sector faces significant challenges. The international nature of betting companies requires ongoing cooperation between Brazil and other countries, in order to prevent illicit practices from being facilitated by companies operating in multiple jurisdictions. This collaboration is essential to prevent the insertion of illicit money into the Brazilian financial system through betting.
It is estimated that the betting market in Brazil, led by the popular bets, may become a significant source of revenue for the government, with projections of billions of reais in tax revenue.
However, for the sector to operate responsibly, it will be essential to maintain strict control over the operations of betting platforms, ensuring that these companies contribute to economic development without opening gaps for illicit activities.
Law No. 14.790/2023 represents a remarkable advance in the regulation of sports betting in Brazil. It not only establishes a legal framework that ensures the legality of operations but also implements robust control and oversight mechanisms, essential to prevent the use of these platforms in money laundering practices.
The betting sector, popularly led by Bets, has the potential to be a significant source of revenue and development, but the success of this initiative will depend on the government's ability to rigorously monitor activities and the collaboration of companies to maintain a safe and transparent business environment.
Livelton Lopes
Master in Economic Criminal Law from the Brazilian Institute of Teaching, Research and Development – IDP, postgraduate in Procedural Law and active in the areas of Economic Criminal Law (money laundering, compliance, tax crimes, and corporate crimes), Crimes Against Public Administration, Business Law, Civil and Electoral Law.
