The International Betting Integrity Association (IBIA) has released its official response to the’ draft regulation’ of the Brazilian government to establish a regulatory system for betting services with fixed odds.
Representing the credibility interests of several sport betting incumbents, the IBIA raises concerns between investors with tax-related regulation provisions and the policy of the Brazilian government to address possible sport manipulations.
In a Statement the IBIA stated: “Our response focuses on two main issues: a) the decision of the Brazilian authorities to propose a 1% turnover tax on licensed betting operators; and b) the lack of detailed integrity measures within the Draft Decree.”
The IBIA recommends that the Brazilian government amend tax and honesty requirements as two regulation factors that will affect the performance of its forthcoming regulatory framework for fixed-odds.
As far as taxation is concerned, the IBIA describes a 1% turnover tax levy as “over-burdensome” on the fiscal systems of Brazilian gambling, which in turn will become “counterproductive to market maximisation.”
In addition, the IBIA questions the government’s claim that a 1% turnover tax is equal to’ about 5-7% GGR charge,’ referring to extensive studies showing that a 1% tax rate can be up to 24% GGR charge on incumbents.
It added: “This would put Brazilian betting taxation towards the higher end of the global scale, along with the negative business constraints that a turnover tax will have on betting operators.”
The IBIA advises the government of Brazil to return to a versatile GGR model which relies on betting service and consumer needs.
With respect to the second issue of the IBIA, the body expresses its confusion at the lack of’ specific integrity measures’ in the Decree, shielding Brazilian sports from match-fixing and bribery.
Despite the Brazilian government’s reference to international cooperation on integrity issues, the IBIA stresses that there has been no systematic breakdown of how to implement steps and safeguards.
Helping Brazilian policymakers, the IBIA refers to European jurisdiction such as Gibraltar and the German state of Schleswig-Holstein that have built active sport integrity monitoring and warning systems using betting power from a variety of stakeholders (police, sports associations, ligaments and licensed operators).
“IBIA supports robust sanctions for those found guilty of betting-related corruption,” it concluded. “However, it is only through cooperation and partnership working, both nationally and internationally, that evidence-led investigations and sanctions can have the desired impact.
“The association would therefore welcome establishing a betting integrity cooperation agreement with the Brazilian authorities to exchange information to protect the betting market and related sporting events.”