The proposal was ready to be voted on in the Senate plenary; however, it was sent back to the Economic Affairs Committee for analysis.
The bill known as the Legal Framework for Games had to go back to the Committee on Economic Affairs (CAE) after pressure from parliamentarians who want changes to the text. Bill 2.796/2021 was ready to be voted on in the Senate plenary; however, it was removed from the agenda on Tuesday (15) by the President of the House, Rodrigo Pacheco (PSD-MG), due to disagreements in the sector. While there are those who defend the idea that regulation could triple investment in games over the next few years, some experts say that the proposal does not serve the games development sector.
In general terms, the bill regulates the fantasy games sector and the electronic games development industry in Brazil. As a result, games would be included in the same tax rules as computer equipment, which could reduce taxes on them. According to the text of the bill, electronic games are those that can be played on computers and all devices "in which the user controls the action and interacts with the interface".
With the bill removed from the agenda, it was discussed again at the leaders' meeting on Thursday (17). At the meeting, it was decided that the bill should go back to the CAE for analysis of four amendments to the text. The updated report, authored by Senator Irajá Silvestre (PSD-TO), was filed on Friday (18), rejecting all the suggested changes to the text.
According to Senator Leila Barros (PDT-DF), there needs to be more debate on the part of the text that includes fantasy games in the rules of the legal framework. These games are played in a virtual environment, simulating real sporting events. Another controversial point is the definition of what electronic games are for the purposes of the bill.
"The original text dealt specifically with electronic games, but the text that was sent to the Senate includes fantasy games. These are absolutely different things. Fantasy games are similar to a betting lottery, which is already being regulated by a provisional measure [MP 182/2023]. There is also disagreement with the definition of electronic games as mere software, disregarding their link with the audiovisual sector," said Leila.
In the same vein, Marcelo Mattoso, a lawyer specializing in the games and e-sports market, says that the text still needs to be improved, with a clearer delineation of what the fat games market is and what the games development sector is.
"There are two distinct universes being discussed in the same project, one being the electronic games sector [games or video games for consoles, PC or mobile] and the fantasy games sector. Both are part of the entertainment industry and both are based on 'games' to generate entertainment content, but they don't correlate with each other, have different target audiences and completely different monetization models. The Legal Framework for Games ends up mixing the two universes and not fully encompassing either of them," he says.
According to him, the proposal that passed through the CAE has gaps, such as the form of inspection, punishment and good practices for the sector. "An example of this is that the text left out things that are essential to the industry, such as cutting red tape for importing materials and services, it says nothing about regional or federal assistance for Brazilian studios and it doesn't propose concrete actions to help develop the Brazilian market," he says.
Another point of tension in the debate revolves around the desire of developers to recognize games as cultural goods. If this is possible, electronic games could benefit from the Paulo Gustavo Law, which has allocated R$3.8 billion to cultural sectors that have been damaged by the pandemic, such as cinema, theater and music.
In the new report, Senator Irajá explains why he rejected the amendments. According to him, the definition of electronic game should be broad enough to cover all sectors of the games industry, but with care not to allow the insertion of elements that de-characterize electronic games.
On the issue of benefits and incentives for the sector, the rapporteur says that the bill seeks to encourage the domestic production of electronic tools and games. "New tools appear every day. Inserting a rule of this nature into the law will mean that the text, if approved, could soon become outdated," he says.
In the opinion of Rafael Marcondes, a specialist in sports law and president of the Brazilian Fantasy Sports Association (ABFS), regulation is essential for the development of this industry. "I think there has been a mismatch of information. The text of the bill has nothing to do with sports betting. It's clear that [fantasy gaming] is a game of skill, not a game of chance. But I think the bill's return to the CAE will serve to trim these edges and put an end to these issues," he says.
Still according to Marcondes, the legislation needs to be clear, but it also needs to allow other decrees and ordinances to be issued, for example, which would be a solution to avoid putting a lock on the sector.
"For example, we're asking for the inclusion of tools that are useful in game development, so that when these tools are imported, they have a certain amount of easier clearance. However, this is a highly technological sector. If you list the tools and tomorrow a new tool comes along, then you have to change the law. This doesn't make sense for the sector, because it creates a bottleneck," he says.
The market is currently worth around R$60 billion a year in Brazil and could reach R$131 billion, creating 5,800 jobs by 2026 - this is what ABFS expects.
If it is approved in the Senate without any changes, the Legal Framework for Games could go forward for presidential sanction. In the event of changes, it will go back to the Chamber of Deputies, which will have the final say.
Source: R7