Brazil presents immense opportunities – Carla Dualib

Shirley Pulis Xerxen January 9, 2024

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Brazil presents immense opportunities – Carla Dualib

Following the recent approval of the Brazilian gaming law, Carla Dualib, Regional Business Development Manager at SOFTSWISS shares her insight.

In summary, the legislation, published on 30 December, mandates that authorised gaming companies, endorsed by the Ministry of Finance and possessing proven industry experience, pay BRL 30 million (€5.6 million) for a five-year exploration licence. These companies must maintain headquarters and management in Brazil, with at least one Brazilian holding a 20% stake in the social capital.

The taxation structure for these companies will entail a 12% tax rate after deductions, with unclaimed prizes divided between the FIES (Student Financing Fund) and FUNCAP (National Fund for Public Calamities). Bettors will face a 15% tax on their winnings, and participation is strictly forbidden for individuals under 18 and industry professionals.

Carla Dualib, Regional Business Development Manager at SOFTSWISS

However, certain sections of the law faced vetoes, such as the proposed exemption of taxation for prizes up to BRL 2,112 (€400), which remains subject to debate in the National Congress. Additionally, the comparison between betting and the lottery, considering their distinctive nature, raises questions. The proposed system acknowledges this distinction, particularly in the context of annual income tax.

Should the exemption of taxation for prizes up to BRL 2,112 be scrapped, Dualib foresees that bettors might face two unfavourable options: either stop betting, which she believes is unlikely, or start betting on unregulated platforms, taking advantage of this grey area abroad. “Bettors are a crucial part of the sector. Without bettors, there are no operators and no tax collection. However, I perceive this as a positive step in the evolution of the process. I’m optimistic that the National Congress will reevaluate the veto and consider the practices while formulating policies for the development of sports betting.”

Asked whether she thinks Brazil remains an attractive market for operations following the law’s approval, Dualib said that

“Without a doubt. Brazil’s vast size presents immense opportunities. Currently, iGaming has achieved a GGR of BRL 45 billion (€8.45 billion), representing less than 28% of the potential target audience. So the market still has a lot to grow. To put it in perspective, the current market size is roughly equivalent to the number of 18-year-olds in Brazil without internet access.”
Carla Dualib, Regional Business Development Manager at SOFTSWISS

Integrity in betting

Asked how the new gaming law should influence the iGaming industry in Brazil, Dualib believes that one of the central themes is related to “integrity in betting.” Dualib concluded that “advocating for responsible and prudent gaming involves adopting and enacting policies, procedures, and internal controls. These measures serve multiple purposes, not only to prevent money laundering and terrorism financing but also to uphold the integrity of betting, thwart match-fixing, and prevent other fraudulent activities. This emphasis on corporate integrity serves as a significant gain, vital for establishing trust among all stakeholders, including players.”

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