Brazil is known for its insatiable passion for football. However, it is also known for engaging in sports betting and is now gaining attention from large players who are spread across the world. The likes of MGM Resorts and DraftKings are among the 100+ companies that have expressed their interest in entering the region and providing the offering to residents. Small players are not precisely pleased about it.
It could still take a while, as the legal framework or regulations are currently taking shape in Brazil. The rise in interest in online sports gambling comes on the grounds that relevant authorities began to ease the legal aspects around 2018. The result is that Brazil is now competing with Spain and the Netherlands in the sector in terms of gross revenue, becoming the fastest-growing sphere all over the world.
President Luiz Inácio Lula da Silva has signed a new framework dealing with licensing fees and other requirements for the companies to fulfill. Some of the pointers talk about R$30 million in licensing fees, with the license due for renewal every five years plus a 12% tax on gross gaming revenue.
The latter part of the problem is causing worry among small players. They have expressed concerns, stating that the percentage could add up for them, discouraging their operations and forcing them to consolidate eventually. These include those players who have invested efforts in setting up the space in Brazil.
Sentiments are necessarily mutual, as most small players have refused to go down without a fight. They have confidently stated that they have sufficient knowledge about local offerings, adding that they will be leveraging that to their advantage.
That said, global players are optimistic that their entrance marks the start of the growing phase of online gambling in Brazil. Griffin Finan has expressed excitement by stating that they will continue to explore the potential for expansion into Brazil. The Senior VP and Deputy General Counsel of DraftKings have also acknowledged that they are one of the 100+ companies to have submitted a non-binding expression of interest.
The interest in online sports gambling and sports is only rising in Brazil. For reference, there is a growing interest in the NFL (National Football League). Its reach has increased by four times and is poised to surge higher in the times to come. Brazil ranked 10th in the world in 2022 with gross gaming revenue of $1.5 billion. Some of the best sports betting sites entering Brazil will potentially assist the region in climbing the ladder.
Companies are still reluctant to enter Brazil due to a lack of regulations. The framework is in progress. From the pieces that have taken shape, it is known that companies are required to establish and maintain a physical presence in the region. This is on top of the licensing fees and tax on GGR.
