The lottery, along with its various gambling games, is already an important part of Brazilian society, and can even be considered as part of the national culture, which is expressed through the habit of citizens periodically doing their “fezinha”.

Some play weekly, others every month and there are those who play only on special dates or when the prizes roll over. And to further expand the possibilities for players, sports betting is approaching full release. Legalized in Brazil since 2018, by Law 13,756, they are just waiting for regulation to come into force.

A nuissance for Brazilians: the high taxation on gambling

According to article 732 of the RIR/2018, everyone who bets and wins takes 30% less of the prize amount home, because the rule provides for the levy of Personal Income Tax (IRPF) at the rate of 30%. on the gross amount of the award.

The person who wins does not pay the tax, as the obligation for this activity is transferred to the operator, who is responsible for withholding it. That is, whenever the player plays in a national lottery, nothing can be done to escape that 30% of IRPF.

The consequence of this high rate is that the Brazilian player ends up looking for foreign lotteries, reducing the retention of national lotteries.

Taxation of sports betting and its implications

Thus, it is worth remembering that even with the regulation of sports betting, if this high tax burden on the bettor is maintained, he will continue to be encouraged to play on foreign (illegal) betting sites.

The point is that the problem is not just the tax collection, but the fact that this withholding is not made by online bookmakers that are not registered in Brazil, making their product even cheaper than the one that will arrive in the country in the correct way.

Basically, this means that the bettor should end up preferring international platforms where he will not pay income tax on winnings. This is one of the main points that needs to be quickly reviewed by the Brazilian government.

Initially, it was provided for in PLS 68/2017 (project of the General Sports Law), more specifically in its article 102, an exemption from the IRPF for prizes won by gamblers of any type of lottery or prediction contest administered by Caixa Econômica Federal or granted by the federal government.

However, the aforementioned benefit was eventually withdrawn from the bill by Senator Roberto Rocha, on the grounds that the issue should be addressed in Law 13,756/2018, which directly deals with sports betting.

In this way, the rapporteur chose to remove from the draft of the General Sports Law all provisions that could conflict with the 2018 rule. , with no potential conflict on this topic.

A new chance with the Legal Framework for Gambling

Having lost the opportunity to relieve the sports bettor through a new General Sports Law, a new opportunity arose, this time through the Legal Framework for Gambling, PL 442/1991.

After several changes and modifications to its text, the draft currently being processed by the National Congress proposes a reduction in the IRPF rate levied on premiums paid to winners from 30% to 20%.

The legislator goes even further, proposing the calculation of the amount of IRPF due on the net gain, that is, on the premium deducted from the amount paid to bet, something that does not currently happen. Today, the tax is charged on the gross amount of the prize received by the bettor, without discounting the expenses incurred by him with the cost of the bet.

PL 442/1991 also provides that there will be exemption from the IRPF if the value of the net gain is up to R$ 10 thousand.

The moment for gambling in Brazil

As much as there may be criticisms regarding the Legal Framework for the Games, there is definitely no denying that, for the first time, there was a watchful eye from the national legislator with the exaggerated and mistaken taxation that gamblers have suffered.

Furthermore, the measures proposed in PL 442/1991, in this field, not only demonstrate concern for consumers, but also strategic intelligence.

Because the Government, by reducing the tax burden of gamblers, also encourages the use of platforms regulated by the Brazilian Public Power, thus bringing more revenue and jobs to the country.