Bolsonaro stalls Brazil’s sports betting launch ahead of October Elections

The progress of Brazil launching its new federal sports betting regime in 2022 has been blighted as President Jair Bolsonaro refuses to sign-off on the approved mandate’s regulatory decree. 

Six weeks have passed since the Ministry of the Economy put forward its Brazil Sports Betting decree to President Bolsonaro’s office to sanction its signature and become a federal law.

At the time, market stakeholders had hoped that the Liberal Party government would sign the decree by the end of May – allowing the Ministry of the Economy to launch a licensing window, ahead of opening Brazil’s regulated marketplace to coincide with the FIFA Qatar 2022 World Cup in November.  

In frustrating developments for stakholders, Brazilian media reports that Bolsonaro has been advised to delay federal sportsbook and gambling proceedings, as the Liberal Party seeks to secure the vote of Evangelical groups in Congress.

Brazil’s General Election looms on 2 October, in which Bolsonaro and the Liberal Party will contest a tough re-election campaign against former President Luiz Inácio ‘Lula’ da Silva’s Workers Party.

As stands, the Workers Party leads opinion polls, which predict that Lula da Silva will challenge Bolsonaro in Brazil’s Presidential run-off, to be hosted at the end of October.

Despite facing pressure from Brazil’s football clubs to guarantee a regulatory certainty on sports betting, the Liberal Party remains firm that federal gambling decrees will be authorised once elections are settled.

By stalling on the decree’s sign-off, it appears impossible that Brazil’s sports betting regime will be launched in time for World Cup 2022, to the frustration of market incumbents.

Though seeking to appease Evangelical groups, the Liberal Party is reported to be split on how Brazil should implement its sports betting regime.  Party peers have previously promised national stakeholders no intervention in proceedings, once approved by SECAP – Brazil’s Secretariat of Evaluation, Planning, Energy and Lottery.

Despite the pledge, President Bolsonaro has previously vetoed all gambling proposals put forward to Congress.

Further revisions of Brazil’s sports betting and gambling decrees could well be sanctioned, as Bolsonaro told Congress that new laws must ensure that licensed gambling firms will be subject to paying all domestic taxes.

Bolsonaro is reported to seek a guarantee that all foreign companies establish a domiciled office in Brazil to guarantee a higher tax income by paying all domestic business tax charges including the ISS (municipal services), PIS/PASEP (employer), Cofins (federal social assistance), IRPJ (fixed income tax), and CSLL (social/civic fund).

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