Brazil lifts 75-year-old sports betting ban

News

Wednesday, January 9, 2019 21:09

By JOHN MUTUA

Brazil has lifted the 75-year ban on gambling opening the way for local betting firms to seek a piece of the market estimated to be worth Sh1.4 trillion.

The Brazilian presidency has approved the sports betting law, allowing for establishment of regulations to guide gamming in the soccer mad nation.

Local betting firms lead by SportPesa are showing interest in the market and will make a decision later whether to set shop in Brazil—which will allow for both online betting and land-based operations.

“It is a market of interest but for now it is too early to say. We have thought about it and we have also contacted the regulators,” SportPesa CEO Ronald Karauri said.

He added that if it opts to go for the Brazilian market SportPesa will set up shop to enable customers bet both online and on-land.

Brazil’s U-turn was informed by the sharp growth of the gaming black market and loss of revenue from off-shore betting. Brazilian authorities placed the black market value at Sh526 billion and now want taxes from the business.

The loosening of regulations is in contrast to Kenya, which preferred to impose taxes to curb online betting, arguing it was hurting the young and the vulnerable.

Kenya in September more than halved tax on gaming to 15 percent from 35 percent—which was imposed in January last year and suffocated the fledgling industry, hurting supporting businesses including telecoms and media companies.

But gamblers were made to pay a 20 percent tax on their winnings, which the Treasury reckons will cover for the halving of the gaming duty. Before January last year, lotteries were taxed at 5 percent on sales and betting firms at 7.5 percent.

In Brazil, land-based betting firms will be expected to pay tax equivalent to six percent of the bets, which police service will take 2.2 percent, football clubs (2 percent), public schools (1 percent) and 0.5 percent to social security.

“It implies benefits will trickle down to all the society and allow the State to harness money lost through illegal offshore sports betting,” a Brazilian commentator said.

Gambling in Kenya generally takes place online with services like M-Pesa allowing users to place bets, pay off losses and get winnings on their phone without needing a bank account.