Hendrich Júnior (Online IPS): “Tax collection from gaming could reach R$20 billion a year”

Witoldo Hendrich Júnior, Founding Partner and CLO, Online IPS Brazil, explains the main points of new gaming legislation in Brazil, a giant market that is creating great expectation among investors, iGaming companies and consumers.

Witoldo Hendrich Júnior, Founding Partner and CLO, Online IPS Brazil. Witoldo Hendrich Júnior, Founding Partner and CLO, Online IPS Brazil.

What are the main points established by the new law on online gambling in Brazil?

The law 13.756/2018 approved sportsbook in the country. It is not regulated yet, like we have no clear view about who is going to collect taxes, how to pay, what declarations need to be done for authorities. But the big step is that it is not a crime anymore.

In terms of tax collection, what it is expected to obtain with this new project?

It will depend a lot on the model. If they approve a more comprehensive model, with casino (integrated or not to a resort area), bingo, poker, sports betting and everything else, some people say it could reach R$20 billion (US$5.19 billion).

Do the companies that will operate the online gaming have to be local or they could be international?

Both. There is no kind of limitation. What it is a sure thing is that they need to be incorporated in the country to get proper licenses, bank accounts and collect taxes in Brazil.

When do you think the first bid for companies will come out?

I would like it to happen before the end of the year, but, realistically speaking it is more like it will be in 2020.

Is the law applied to the whole country? Who will be the regulator?

Yes. We don’t have the possibility to regulate differently by states, like other countries. In terms of the regulator, it will probably be a Board under the Ministry of Finance. I hope it is not attached to Caixa Econômica Federal. Ideally, we should have an independent agency, even if it is under a Ministry.