Brazil’s Sports Betting, iGaming Bill Survives Senate With Lower Tax Rate
Posted on: November 23, 2023, 06:49h.
Last updated on: November 23, 2023, 10:35h.
Brazil’s Senate has unclogged whatever was keeping the country’s sports betting bill from moving forward. On Wednesday, the chamber’s Economic Affairs Committee (CAE, for its Portuguese acronym) approved a project that regulates and taxes the sports betting and online casino market.
The proposal establishes rules for the operation of sportsbooks across Brazil, and a 12% tax on operators, according to an announcement on the Senate’s website. This is lower than the 18% that had recently been included after the Chamber of Deputies suggested 5%.
The version the CAE approved also recommends a 15% tax on the amount bettors win. This is also a reduction, with Brazilian Minister of Finance Fernando Haddad previously wanting the rate to be as much as 30%.
The committee also approved a request that calls for an urgent vote on the proposal in the Senate. That vote could take place next week.
Closer to the Finish Line
The proposed rules must apply to so-called fixed-odd bets on real sporting events — that is, games in which the bettor knows, at the time of betting, how much he could win if he is right. It is also valid for online gaming, such as casinos.
The project is one of the Ministry of Finance’s bets to increase the country’s cash flow next year. The Treasury has given its approval to proposals that will help achieve the fiscal target of zero deficit in public accounts in 2024 without increasing public debt to meet expenses and investments.
The changes the CAE approved will likely impact the Treasury’s initial revenue projection, which it had said could produce up to BRL700 million (US$142.66 million) next year. Senator Jaques Wagner, a close ally of President Luiz Inacio Lula da Silva, said that the Treasury should carry out new studies and that there was no “controversy” with the reduction in taxes.
In the case of bettors, the tax will only be paid once a year, and through Personal Income Tax (IRPF, for its Portuguese acronym). Taxation will only apply to winnings, minus the amount wagered, that exceed the IRPF exemption table, currently at BRL2,112 (US$430).
Operators Pick Up Wins
The reduced tax rate for operators, if it survives further scrutiny, isn’t the only victory they’ve received. The current text states that online operators will pay up to BRL30 million (US$6.11 million) for a license, depending on subsequent regulation by the Ministry of Finance.
The authorization will be valid for up to three commercial brands, and for five years. However, when the Chamber of Deputies approved its version of the regulations in September, the proposal was for only one brand and for validity of up to three years.
The approved text provides for an authorization process and a series of requirements for online betting companies. It will be up to the Ministry of Finance to sign off on the operations.
To request permission, the company must have its headquarters and be incorporated in Brazil. The process will be based on the analysis of documents, reputation, and the company’s technical and financial capacity.
One of the recent amendments included a requirement that a company must have a Brazilian with at least 20% of the share capital as a partner. That requirement still stands.
There still haven’t been a lot of details about how the online gambling segment would work. However, the fact that the language is part of the bill is good news.
If the Senate plenary approves the reforms, the bill will return to the Chamber of Deputies. There, it will need to be approved once more before it can be ready for conversion into law.
Source: casino.org
