Bookmakers will be taxed at 15%, says agency – 06/04/2023 – Market

By regulating the online sports betting sector, the Ministry of Finance should institute a 15% tax on gaming revenue, in addition to requiring the payment of a R$30 million grant for companies to operate in the country, two sources with knowledge of the subject.

The rules will be instituted through a provisional measure, which is being finalized by the government and should be edited after the return of President Luiz Inácio Lula da Silva and Finance Minister Fernando Haddad from their official trip to China next week.

The values ​​were initially disclosed by the Poder360 website and confirmed by Reuters, which had already anticipated the government’s intention to charge grants to allow companies to operate in the country. The payment of R$ 30 million, according to the sources, will make the company receive a license for five years of operation.

One of those responsible for formulating the measure stated that the 15% tax will be levied on “gross gaming revenue”, gross revenue obtained from all games played, subtracting the prizes paid to players.

According to this source, who requested anonymity because the discussions are not public, the MP must also bring a device to authorize the return of Lotex (Exclusive Instant Lottery), known as “scratch card”.

The modality has been out of operation in the country since 2015. Between 2016 and 2019, the government made attempts to privatize Lotex, the instant lottery arm of Caixa Econômica Federal, but the operation was not successful.

The provisional measure is one of the bets of the economic team to expand tax collection, seeking to demonstrate commitment to the trajectory of improvement in public accounts.

After initially predicting that the measure could generate an annual gain of BRL 6 billion for the government, Haddad said this week that the accounts were revised and now indicate a potential collection of BRL 12 billion to BRL 15 billion.

Recently, the mayor, Arthur Lira (PP-AL), said in a private conversation with leaders of the House that, in principle, he is in favor of taxing online betting, according to a source with direct knowledge of the matter.

In so-called fixed odds bets, the bettor tries to predict the results of sporting events, such as the score, number of yellow and red cards, goal scorers and player substitutions, for example. When betting, the person already knows how much he can win if he hits, by applying a multiplier of the bet amount.

A law passed in 2018 authorized sports betting in Brazil, but determined future regulation of this market, which has not yet been done. Therefore, the government is unable to tax the sector so far.

In recent years, companies in the sector have grown in popularity in Brazil, taking on a series of sponsorship contracts for sports clubs, in addition to advertising on television channels and social networks of digital influencers.

According to industry data, at least 20 companies already operate in the online sports betting market in Brazil. Among the brands are Bet365, Sportingbet, Sportsbet, Galerabet, Pixbet and Betano.