The online betting sector has grown considerably in Brazil and there is no prominent football club that does not have or want a sponsorship agreement with a bookmaker. These are evidences of a market that, according to specialists, generates up to BRL 150 billion per year, however it still operates informally, without taxation.
The government intends to tax the segment to increase revenue and meet the goal of zeroing the public deficit in 2024, foreseen in the new fiscal framework. The major players in this market, according to O GLOBO, evaluated the federal regulation project positively.
Regarding the tax rate, however, companies require that it correspond to those practiced in other countries that already charge tax on betting. The online betting sector understands that a high percentage can impact legal action and encourage informality.
“The regulation of the activity is extremely welcome. But what should be evaluated is the government’s expectation of revenue: the numbers disclosed as potential are not realistic and are based on data with little foundation”, said Darwin Filho, CEO of Esportes da Sorte.
The Minister of Finance, Fernando Haddad, revealed that the collection estimates with the new taxes on online gambling were revised and jumped from R$ 6 billion to between R$ 12 billion and R$ 15 billion.
The segment’s request is to implement already established taxation systems, such as that of England, where there is no Income Tax levied on the bettor’s winnings and there is only taxation on the so-called “Gaming Gross Revenue” (GGR) or “Gross Revenue”. of games”.
BRL 30 million grant for the online betting sector
The government will announce other measures that could generate an annual increase of more than R$100 billion in public coffers, reducing the deficit of R$231 billion expected for this year, according to Haddad.
The minister said that he had already met with betting companies, who were in favor of regulation to inhibit illegality. Haddad stated that the new rules will be instituted through a provisional measure.
According to O Globo, the rate on gross revenue from games should be 15%, following international standards. As the betting sites are based abroad, the government plans to charge a grant, whose value should be R$ 30 million for five years.
In addition, an Income Tax charge is being analyzed on top of the bettors’ winnings and what percentage will be charged. According to experts, around 90% of Brazilian gamblers play recreationally and would not pay income tax due to the values.
“The issue is that there is the possibility of reducing this 30% rate, but extending it to all bettors. This is considered a risk for the future of the operation, since the best global practices operate with an exemption range to prevent gamblers from migrating to the informal market”, says Magnho José, president of the Instituto Brasileiro Jogo Legal.
The projection is that the market has increased a lot since 2018, when it was legalized through a decree signed by then President Michel Temer (PMDB-SP). The online betting sector moves between R$ 120 billion and R$ 150 billion a year annually.
Gross Gaming Revenue
Gross Gaming Revenue would be between R$10 billion and R$12 billion, calculates Magnho José. About a thousand platforms operate in the online betting sector. “Today, Brazilians, in addition to cheering, bet. This behavior was consolidated as cultural, and the growth in numbers was monstrous”, says Magnho José.
Today, 39 of the 40 clubs in the A and B series are sponsored by bookmakers – the only exception is Cuiabá. Last week, some clubs released a letter asking the government to participate in discussions on the new rules for the sector.
“The digital betting environment has run over the progress of bills that deal with casinos and games in Congress. Currently, any citizen accesses and bets on sites based in other countries. It is a sector without regulation, since there is no mechanism to avoid deviations in results, for example”, says lawyer Eduardo Carvalhaes, partner in Public Law at Lefosse law firm.
For Carvalhaes, the taxation and regulation of the online betting sector will bring legal certainty, combat addictions and, of course, revenue. “Today, the intellectual capital and labor are in other countries. With the companies installed in Brazil, we will have the generation and formalization of jobs and legal security”, stressed Márcio Falcão, from Casa de Apostas.
The CEO of Galeda.Bet, Marcos Sabiá, mentioned that it is necessary to prohibit the advertising of betting sites as a form of investment. “Presenting itself as an investment tool is wrong and goes in the opposite direction of what happens in the world. Bets have the connotation of entertainment and fun, they do not have the objective of investment, not least because there are many variables that are not in the control of the bettor”, he concluded.
