The sports betting market in Brazil has potentially grown this year and, although it is a scenario on the rise and with a lot of economic strength, it still attracts attention due to its lack of regulation, directly affecting the issue of the integrity of results and also doubts about how the taxation of bets occurs.
Bets are legal under the Law, guided by regulation 13.756/2018 valid until the end of this year. But with the boom of this market, the emergence of more bookmakers and more modalities, fostered by the World Cup, an important debate is heated: “How is the taxation of this economic activity?”
Specialist in tax law, Luiza Leite clarifies that “betting is lottery activities that generate large revenues, but, with outdated legislation, the government is failing to collect significant amounts that would reduce the impact of the deficit on the economy.”
Still on the absence of taxes, Patricia Gaia, a partner at Sacha Calmon-Misabel Derzi, adds: “Brazil potentially has one of the biggest markets for this sector. The regulation of this activity will bring security to gamblers and increase the collection of the Union.”
In terms of numbers, it is a billionaire market that moves around R$ 160 million (US$ 30.8m) a day in Brazil and receives more and more injections of financial investments, mainly from foreign companies that see Brazil as a profitable field of activity, without any collection from the Brazilian government.
Gap in legislation
In the absence of a robust law and with poor supervision, foreign bookmakers benefit from a loophole in the legislation, which taxes companies at 30% on top of their net income, but this discount does not apply to sites hosted on servers outside Brazil. It is worth remembering that the betting market in the country is mainly driven by these foreign operators.
Luiza Leite explains about the need to tax operations. “What we have in terms of revenue is when the gambler makes the withdrawal in Brazil and declares the Income Tax, but we don't have anything related to operators that act freely from taxes. With the collection, in addition to security for the user, the value will be passed on to other sectors, improving the economy and generating jobs.”
Also in favor of adequate taxation, Patricia Gaia concludes: "The regulation will allow the consolidation of these activities in the market and the establishment of a clear relationship between the State, operators and bettors, allowing the correct functioning of the activity in the country."
It is worth remembering that bookmakers are intensifying their operations, making intense publicity and closing partnerships with sports clubs and sponsorships. The regulation will offer more security to the market, neutralizing fraudulent websites, and allow the scenario to have healthy competition, attracting investors to related segments. It is a promising path that needs to be taken advantage of, experts believe.
Source: Correio Braziliense
