Government taxes betting companies at 18%; prizes will have 30% IR

Promised a few months ago, the provisional measure (MP) that regulates the online sports betting market (the so-called “bets”) was published this Tuesday (25) by the federal government.

The text establishes a tax of 18% on the so-called Gross Gaming Revenue (GGR), which is the revenue obtained from all games played, minus paid prizes and taxes levied on legal entities. In addition, the player now pays 30% Income Tax (IR) on prizes received above the exemption range, which goes up to R$ 2,112.

The rules come into force this Tuesday, but must be analyzed within 120 days by Congress in order not to lose their validity. “The proceeds from betting go to the budget with a low forecast. We estimate something around R$ 2 billion per year”, said the Minister of Finance, Fernando Haddad.

For the coming years, with the market fully regulated and in full revenue, the government estimates an annual revenue potential of between R$ 6 billion and R$ 12 billion. The projection considers data on segment growth in Brazil and worldwide.

According to the Ministry of Finance, of the 18% collected from the GSS, 2.55% will be allocated to the National Fund for Public Security (FNSP) for actions to combat betting manipulation, money laundering and other acts of a criminal nature that may be practiced in the context of betting or related to it.

The remainder will be divided between the area of ​​basic education (0.82%), sports clubs (1.63%), social security (10%) and the Ministry of Sports (3%).

By means of a decree to be published shortly, a secretariat will be created within the scope of the Ministry of Finance for the analysis of documents, for approval or not of the accreditation of betting companies in the country.

The secretariat will also monitor the volume of bets and revenue, ensuring greater control over the fixed-quota sports betting market, according to the government.

In addition to editing MP 1,182/2023, the government will also send a bill (PL) to Congress this Tuesday that deals with the structure and administrative processes for monitoring the sports betting market. Both the MP and the PL were jointly prepared by the Ministries of Finance and Sports.

The texts establish that only qualified companies will be able to receive bets related to official sporting events, organized by federations, leagues and confederations. Unlicensed companies that promote the activity will incur illegal practices and will be prohibited from carrying out any type of advertising, including in digital media.

In addition, betting companies should promote informative and preventive actions to raise awareness among gamblers and prevent pathological gambling disorder. The rules for communication, publicity and marketing, such as advertising time and the format of online advertisements, will be prepared in partnership with the National Council for Advertising Self-Regulation (Conar).

According to the government, the aim is to ensure that marketing actions are responsible and ethical, contributing to a safe and regulated betting environment.