Sports Betting Expected To Generate Almost $4 Billion In Brazil During The Qatar World Cup

Sports Betting Expected To Generate Almost $4 Billion In Brazil During The Qatar World Cup

Without enough time to regulate the sports betting market ahead of the World Cup that will be held in Qatar this year, it is considered that the Brazilian government has already lost the opportunity to collect significant revenues generated by the activity.

Specialists estimate that the regulation will generate around R$ 3 billion a year (just over $588 million) for the State, in addition to R$ 2 billion ($392 million) from the sale of operating licenses. The World Cup alone will move more than 20 billion reais in bets in the country ($3.92 billion).

Although the tournament will be held between November and December of this year, the government of Jair Bolsonaro decided to postpone the decree to implement Law 13.756/18, which regulates the sports betting market in the country.

The delay of the measure is due to the electoral calendar, as the president fears losing the support of the evangelical bench if he endorses this gambling modality.

Approved in 2018, by the government of Michel Temer, the law aims to curb tax evasion by foreign operators. As several gambling sites are based outside Brazil, taxation is minuscule compared to what should be generated by a market with estimated revenues of R$7 billion ($1.372 billion) and a turnover of approximately R$60 billion ($11.76 billion).

Based on this scenario, a study was prepared with the PPI (Investment Partnerships Program), the PND (National Privatization Program), and the BNDES (Brazilian Development Bank). Consequently, a provisional measure was created that provides for penalties in the market. The text was passed to the Ministry of the Civil House, and now awaits Bolsonaro’s sanction.

“We are basically talking about penalizing an existing informality, protecting the bettor, and curbing currency evasion. What we see today is bad for Brazilian society,” said André Gelfi, managing partner of the Betsson Group in Brazil. “It is an activity that already moves 60 billion reais in the country, which has no rules and, until now, is neglected by the public authorities. Such is the size of the disaster,” he added.

It is estimated that the revenues collected during the World Cup will be three times higher than the average. This revenue will be lost to the Government because there is no longer time to reach a regulation. If regulation is not implemented within the December deadline, the regulatory bodies will put pressure on the government to understand what happened, and to hold those involved accountable for their actions.