How the USA, Europe and Latin America regulate sports betting – 07/21/2023 – Market

The federal government should soon announce the regulation of sports betting in Brazil.

The Civil House confirmed to BBC News Brasil that the proposals are awaiting a decision from President Luiz Inácio Lula da Silva (PT).

Sports betting must be regulated through a provisional measure and a bill, which will be sent to Congress.

The issue is the target of a CPI (parliamentary commission of inquiry) that investigates allegations of manipulation of football matches to favor gamblers.

Regulation has been defended by members of the CPI as an important instrument to curb fraud.

The new rules should establish how company revenues and prizes paid to bettors will be taxed, in addition to establishing how permission for betting companies to operate in the country will be made.

The Minister of Finance, Fernando Haddad, said that the government estimates that it will raise BRL 2 billion in 2024 with taxation of sports betting.

Part of the amounts collected must be used for investments in education and public safety, for the cost of social security and the Ministry of Sport, in addition to payments to clubs for transferring brands to betting sites.

In addition to taxation, the new rules should establish sanctions for companies that do not meet the platforms’ operating criteria.

Sports betting was authorized in Brazil by a law passed in 2018.

Norms for this type of activity should be created through new laws, but this has not been done so far.

The lack of regulation created a legal limbo that led companies in the sector that operate in Brazil to operate from other countries, especially in the Caribbean and Mediterranean.

The proliferation and popularization of betting sites in recent years has created challenges for governments in various parts of the world.

Traditionally, sports betting was done face-to-face. The internet made this market grow a lot because it is now possible to bet on a much greater variety of championships and sports.

Heather Wardle, a professor at the University of Glasgow in Scotland and an expert on sports betting, says, “Online gambling offers seamless access to products in a way that wasn’t possible 20 years ago.”

“Online gaming also fundamentally changes the nature of the industry, as big technology companies are making use of all the insights and information they have about people, and are able to have a very direct relationship with their consumers through their devices and digital footprints.”

“They use all that information to direct people to continue playing.”

This sports betting boom has led other countries around the world to regulate this type of activity.

Understand below how these rules currently work in the United States and in countries in Europe and Latin America.

Latin America

The betting industry has dubbed Latin America the “sleeping giant” for its huge potential that they see as untapped and the large number of sports fans, says Wardle.

Among the countries in the region, there is great disparity in the regulatory stages of the sector.

In general, countries that have rules charge fees for operators to regularize and require them to have headquarters in their respective territories.

Colombia was a pioneer in 2015 by establishing rules for the operation and taxation of sports betting sites and creating a body, Coljuegos, to supervise this activity.

There is no limit to the number of platforms that can operate, and the licenses are valid for three years, renewable for another five years.

In addition to the taxes levied on companies, bettors’ profits from a certain amount are also taxed at 20%.

Much of what is collected is destined for the country’s health system. So much so that Coljuegos uses the slogan “bet for health”.

In total, in 2022, around US$ 236 million (R$ 1.132 billion) were collected from gambling in the country, of which US$ 151 million (R$ 724 million) were destined to health.

Between 2018 and 2022, the size of the sector has almost sextupled in Colombia, where there are currently more than 8 million active accounts on betting sites.

“This has generated technological challenges and challenges associated with protection,” Coljuegos told BBC News Brasil in a note.

“Rapid growth has led to millions of transactions per day, which generates huge volumes of information to transform and analyze.”

Coljuegos assesses that it faces a “scourge” of illegal gambling and makes constant efforts to control it.

The agency claims that it managed to block more than 10,749 websites that offer gambling on the internet and 121 social network profiles in which this type of unauthorized platform was promoted.

In Argentina, each Province is responsible for establishing its own rules, and bettors can only access a certain site if they are located in the region where the platform is authorized to operate.

In the Province of Buenos Aires, only seven licenses were granted, valid for 15 years. A portion of what is collected goes to education.

In Chile, the lack of regulation is a matter of concern for government officials, as well as in Brazil.

The proposals currently aim to dedicate part of what is collected to incentive measures for Chilean sport.

Chilean economist Maurício Holz carried out a study comparing the strategies of Colombia, Spain and the Province of Buenos Aires.

Holz explains that mechanisms such as the number of licenses granted, their duration and the frequency with which they are granted act as an entry barrier for this market.

This allows, according to the expert, to have greater control over companies.

“The requirements aim to guarantee the company’s ability to fulfill its obligations both with the regulatory body and with its customers”, he says.

Holz argues that control mechanisms and sanctions for companies that violate the rules are fundamental for regulations.

Wardle agrees and reckons that, “where permission to play is accompanied by inadequate regulation and enforcement, there is a real danger to the health of the population in those countries”, reckons Wardle.

Coljuegos claims that it has been collaborating with the Peruvian government so that the country implements a system similar to the Colombian one and that it frequently receives contacts from other countries in the region that want to regulate the sector.

U.S

In the United States, in 2018, a decision by the country’s Supreme Court annulled a 1992 federal law that banned sports betting in most states, paving the way for the legalization of the activity, but excluding university competitions from the list of possible bets.

The regulation of sports betting is up to each State in the country, as well as other issues, such as abortion and the criminalization of drugs.

Currently, 34 of the 50 US states have some type of permit for the activity.

The state of Nevada, home to the city of Las Vegas, the gambling capital of the United States, was one of the first to regulate sports betting.

Meanwhile, governments such as those in Delaware and South Dakota allow betting, but only in person.

Last November, Californians went to the polls to vote on legalizing sports betting in the state. The proposal was rejected.

Europe

With a culture consolidated for decades in this type of activity and some of the main companies in the sector, Europe has had a series of regulations in the area for years.

Since 2005, the United Kingdom has legislation on the subject, which establishes, for example, which authorities can grant licenses to platforms and the annual fees that each one must pay to operate.

In Spain, a decree established the guidelines for betting in 2011, and a 20% tax is applied to platform revenues.

To grant licenses, there must be at least one permanent representative in Spanish territory.

The permits are valid for ten years, which can be extended for an equal period.

Italy is one of the countries in the region where the issue is more sensitive, as local football championships have been hard hit by manipulations involving sports betting on some occasions, such as in Brazil.

Local legislation has undergone some changes since 2007. Most have sought to reinforce the presence of Italian companies in the field and, more recently, taxation of company revenues has increased, and limits have been imposed on the amounts paid to bettors.

Similar changes are discussed in the UK to update industry rules.

The bills, pending in Parliament, also include a fee that would be charged from companies to pay for addiction treatment and prevention measures, with a particular focus on young people aged 18 to 24 who, according to the evidence, are at greater risk of harm.

Concern about addiction is constant in the country. The theme led to elite local football teams agreeing to no longer display bookmaker sponsorships on their shirts, something that has also been adopted in Spain.

For Wardle, there needs to be a much tougher stance on gambling advertising, marketing and sponsorship.

“It is unlikely that rules adopted voluntarily are effective. History shows that they are often circumvented with little repercussions”, he assesses.

Recently, a country that made progress on the subject was France, where Parliament prohibited the participation of influencers and athletes in bookmaker advertisements.

“It’s really important to look at things like this and the ways in which gambling companies and their affiliates are using a wide range of social media to sell their products,” says Wardle.

“A lot of this happens in a really non-transparent way, and [estas redes sociais] can be accessed by children and young people, which is ethically questionable.”

This text was published here.