Brazil🇧🇷: operators will not receive compensation for licenses after total gambling ban

Brazil🇧🇷: operators will not receive compensation for licenses after total gambling ban

Lawyers are already expecting a wave of lawsuits challenging the ban.

➡️ The decree imposing a total ban on gambling, signed by President Luiz Inácio Lula da Silva on September 25, exempts the authorities from compensating betting companies for the early termination of their activities and from refunding license fees. Industry representatives intend to challenge this provision in court.

➡️ The amount at stake: at the time the decree was signed, there were 85 active licenses in the country, each costing USD 5.75 million; in total, operators had paid USD 489 million to the Treasury.

➡️ Rationale: the decree states that the licenses were terminated on grounds of public interest. Therefore, companies cannot claim reimbursement of the funds paid or compensation for investments and lost profits.

➡️ Budgetary impact: with the end of betting operations, the federal Treasury will stop receiving more than USD 153 million per month. Since the regulated market began following the adoption of the Betting Law in December 2023, revenue has reached almost USD 3 billion, excluding concession fees. Under the Betting Law, these funds were allocated to sports, tourism, public security and social programs.

➡️ As for sports: next week, the government is preparing a meeting with representatives of football clubs ⚽️ to prevent a backlash from teams sponsored, among others, by betting companies. The largest beneficiary of betting was Flamengo, which will now lose annual revenue of USD 51.5 million. The club has already stated that it has no "Plan B."

➡️ The social cost: experts believe that a total betting ban will push habitual bettors into the unregulated sector, where they will be even more vulnerable, while the stated objective of the ban is to reduce the debt burden on lower-income groups. In addition, illegal operators could benefit from the ban: if the illegal gambling market currently accounts for around 41% of bets, this figure could rise to 78-82% following the ban.

#news #Brazil #gambling #betting

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