The government's announcement about increasing sports bets has negatively repercussed between experts and industry leaders, which point to economic risks and favoring the illegal market.
A study by LCA Consultores, in partnership with the Brazilian Institute of Responsible Game (IBJR) and the Locomotiva Institute, reveals that between 41% and 51% of the Brazilian betting market remains illegal, causing an estimated fiscal loss between R$1.8bn (US$325m) and R$2.7bn (US$488m) in just three months, and could reach up to R$10.8bn (US$1.95bn) annually.
According to the provisional measure published by the government on June 11, taxation on the revenue of sports betting companies will be raised from 12% to 18%. Additional revenue should be destined for health. The MP has immediate validity, but must be appreciated by Congress within 120 days and may be converted into law or overthrow.
Marcos Sabiá, CEO of galera.bet, states that the focus should be on fighting clandestine bets, which would double the collection without further burden the sector. Alex Rose, CEO of the Inplaysoft (United Kingdom) platform, warns of the risk of strengthening the illegal market, citing European countries as an example.
Betlaw partner Bernardo Freire and ANJL Legal Consultant, points out that the increase lacks a technical basis and can cause legal insecurity, favoring clandestine operations.
Fernando Vieira, president of IBJR, criticizes the government for increasing tax burden to the regulated, especially five months after regulation, generating a break of confidence and legal insecurity.
Bernardo Freire, partner of Betlaw and legal advisor to the National Association of Games and Lotteries (ANJL), states that the measure lacks technical fundamentals and can result in legal uncertainty, benefiting clandestine operators. "It is an increase without any technical foundation and the basis of the reality of the market. Purely reflects the personal will of Minister Haddad, in evident mismatch with the government's inertia to combat the illegal. Minister Haddad, with this decision, shows that it is the great name in favor of illegal operators in Brazil, as the tax increase will generate serious legal uncertainty and favor the proliferation of clandestine companies."
Fernando Vieira, IBJR's executive president, emphasizes the seriousness of the situation: “The numbers are terrifying and demonstrate the urgency of effective combat to the illegal market. Paradoxically, just five months after having agreed the operating conditions with operators, the government presents illegal increased tax burden to the regulated. This brings a break of confidence and enormous legal insecurity to the sector and Brazil.”
The LCA Consultores survey also reveals that 78% of gamblers have difficulty distinguishing legal sites from illegal, and 46% have already deposited money on false or irregular platforms.
Renato Meirelles, president of the Locomotiva Institute, highlights the importance of educational campaigns: “Consumer confusion is explored by these illegal operators. It is essential to conduct educational campaigns and reinforce clear communication about risks!”.
Source: Veja
