It is already practically a fact that the betting regulation would bring necessary benefits to Brazil. With the immense potential of the iGaming sector, we would have an essential source of income for different areas of society, from health to education.
In addition, we would be able to expand the strength of the betting modalities that already exist in the country, such as lotteries. Lotteries are part of Brazilian culture and people do their ‘fezinha’ at lottery shops every day.
To better understand the scenario, FGV (Fundação Getúlio Vargas) carried out a survey detailing how the regulation of betting would boost tax collection from lotteries in Brazil.
Check out the full news on the regulation of betting in Brazil
Tax collection from lotteries in Brazil would grow 140% in 1 year with the regulation of intermediation companies in the lottery sector, which connect the CEF (Caixa Econômica Federal) lottery to the customer. In addition, the impact of intermediation could approach R$ 1 billion if the regulation results in an area growth of around 20% to 30%.
The conclusions are from a study carried out by FGV (Fundação Getúlio Vargas) Projetos and commissioned by Aidiglot (Association of Digital Intermediators of Lottery Games).
Currently, intermediation companies in the lottery sector are in the so-called “gray market” (parallel market, in Portuguese). This means that the initiatives are not considered illegal, however, they are not fully legalized either, since they do not have specific regulatory legislation.
The survey also showed that the actions of intermediaries in the lottery sector in Brazil resulted in an average annual increase of approximately R$556 million in Caixa’s collection over the last 10 years. In 2021 alone, the impact caused by intermediation is approximately BRL 870 million in revenue, according to FGV Projetos.
In the last 10 years, revenue from lottery games has shown an average growth rate of 6.5% per year.
“An expansion of the lottery gaming market made possible by the establishment of a regulatory framework suitable for the development of intermediation services for this activity would contribute both to the decline of inequalities and social ills verified in the Brazilian reality, and to the stimulus of considerable increments in the portfolio of wealth national level, both directly, in the generation of employment and income, and indirectly, through the multiplier effect in the economy”, says the research.
According to the president of Aidiglot, Mirko Mayeroff, “the lottery intermediation service is still hostage to a normative ‘limbo’” in Brazil.
“Among the various obstacles, it is worth mentioning: restrictions on advertising vehicles, reduced credibility with the public, lack of authorization to make applications available, restrictions on Google Ads and other media platforms, increased operating costs and lack of an electronic interface for registering games, which obliges intermediaries to deal with physical tickets, being responsible for archiving, collecting and transporting them”, he said.
According to the Association of Digital Intermediators of Lottery Games, there are more than 20 platforms that act in the intermediation of lottery bets in Brazil.
“Prospects and projections for the sector show that the growth seen in the Brazilian lottery market could reach even greater levels with the institution of an adequate regulatory framework for the consolidation of lottery game intermediation services in the country”, says the study.
ONLINE BET TAXATION
This Tuesday (14.Mar.2023), the Minister of Finance, Fernando Haddad, said that the draft of the provisional measure to tax electronic sports betting is ready and should be released after the trip of President Luiz Inácio Lula da Silva (PT) to China at the end of March. According to him, the government should establish a contribution on the sector.
On March 1, Haddad estimated that the collection with the new contribution should vary from R$ 2 billion to R$ 6 billion. In an interview with the UOL news portal, the head of the Lula government’s economic team said that the Federal Revenue Service and the Secretariat for Economic Reforms are working to arrive at an exact figure.
The model “is ready”, but the projection is not converging, according to the minister. At the time, Haddad stated that taxation on the sector will serve to offset losses with the correction of the IR (Income Tax) table, which has been outdated since 2015.
“We readjusted the IR table and that had a small loss of revenue. We are going to compensate with the taxation on these electronics, which do not pay any taxes and take a fortune of money from the country”, said Haddad.