Data from the Treasury indicates that 51 companies have already applied. Forty of them did so after 31 July, when the federal government published the ordinance with rules for electronic games that involve prizes, such as sports betting platforms known as bets.

It will be possible to apply from tomorrow, when the deadline will have passed, but without the guarantee of obtaining authorisation before January 1st, when regulation of the sector in Brazil comes into force.

The Treasury decree, which the sector has been waiting for for months, established rules for online casino-type games. Bets were authorised during the Michel Temer (MDB) government within the so-called ‘fixed odds’ betting, in which the winnings are informed at the moment the bettor places their bid. In the case of other online games, the punter can't know how much he can win at the start of the match.

The government was trying to find a way to include these within the legal framework built for betting. On 31 July, online casinos were authorised, provided that the platforms present a table of potential winnings.

USD 6 million grant
Data from other countries shows that most of the companies' turnover comes from online gambling. For some companies, permission to operate casinos alongside betting would be crucial in order to pay the R$30 million grant, the amount they will have to pay the government for the licence.

The regulation establishes new tax collection rules. In January, companies will have to pay 12 per cent on the so-called GGR (Gross Gaming Revenue, the amount wagered by users, minus the prizes paid out), while players must pay 15 per cent Income Tax in the case of prizes of more than R$2,200.

134 had shown interest
This set of rules helped select only the most structured companies, says Caio de Souza Loureiro, a partner in the Gaming & E-Sports area at TozziniFreire. The lawyer mentions that the number of licence applications exceeded the initial estimates of those who follow the sector, which was that only 30 companies would show interest in the regulated online gaming market.

In November last year, the Treasury shared a list of 134 companies that had demonstrated their intention to operate in the regulated betting market. However, the majority had no interest in operating online betting and only signed up because they thought the number of licences would be limited. That way, they could sell their place in any queues.

Betting CEO sees selection
Representatives of the sector point out that the regulations were designed precisely to select the most relevant players with operational capacity. In addition to the R$30 million grant, operators must have a company incorporated in the country, holding at least 20 per cent of their share capital.

- The regulated market will ensure that only companies with an unblemished reputation and that adopt best practices, such as compliance, fraud prevention and the promotion of responsible gambling, remain - says Darwin Filho, CEO of the Esportes da Sorte Group, which applied for authorisation covering both the operation of Esportes da Sorte and Onabet, another of the group's online betting platforms. Each company can apply to register up to three brands.

The companies that filed the request in this first phase were precisely those that already operate in Brazil and would suffer losses if their operations were suspended from 1 January. That's why, says Loureiro, the requests over the next few months should come mainly from foreign operators interested in entering the Brazilian market.

Mariana Tumbiolo, a partner at Madruga BTW Advogados, says that some international companies have faced problems in complying with the rules established by the regulations, such as the requirement to establish representatives in Brazil. There have been cases in which visa applications for these employees were not answered in time.

Loureiro adds that there are foreign players negotiating mergers and acquisitions of companies that already operate in Brazil and are on the list of requests addressed to the Ministry of Finance.

The British newspaper The Times reported that the giant Flutter Entertainment, for example, is negotiating the purchase of BetNacional for £1 billion (more than R$7 billion). The company is currently owned by NSX, which is on the list of grant requests.

By Ana Flávia Pilar