Lotteries and their different products are part of the daily life of Brazilians. It is already the habit of citizens periodically to do their "little thing", some play weekly, others every month and there are those who play only on special dates or when the prizes accumulate. To expand the range of possibilities for players, sports betting should soon arrive. Legalized in Brazil since 2018, by Law 13,756, they are just waiting for regulation to come into force.
However, one point plagues Brazilian gamblers: the high taxation of paid prizes. According to art. 732 of the RIR/2018, everyone who bets and wins, takes home 30% less of the prize amount, because the rule provides for the incidence of Personal Income Tax (IRPF) at the rate of 30% on the value gross of the award.
In practical terms, the winner does not collect the tax, as the obligation has been transferred to the operator, who is responsible for its withholding. That is, whenever the player plays in a national lottery, there is little he can do to escape the 30% IRPF.
The practical consequence of this high tax burden is that players increasingly seek foreign lotteries. It is true that sports betting, as they still depend on regulation, do not have operators operating in the country on a regular basis.
However, the fact is 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 problem is not only the collection of the tax itself, but the fact that this withholding is not made by online bookmakers that do not have their registration in Brazil, which makes their product cheaper than the one that must come to be implemented in the country.
Basically, this means that the bettor should end up preferring international platforms where he will not pay income tax on winnings.
This is a point that needs to be quickly reviewed by the Brazilian government.
Initially, it was provided for in Bills 68/2017 (Project of the General Sports Law), more specifically in its art. 102, an exemption from the IRPF for prizes won by players of any type of lottery or prediction contest administered by Caixa Econômica Federal or granted by the federal government.
However, this benefit ended up being removed from the bill by its rapporteur, Senator Roberto Rocha, on the grounds that the issue should be addressed in Law 13,756/2018, which deals with sports betting (called by the legislator quota betting fixed). Thus, the rapporteur chose to remove from the draft of the General Sports Law all provisions that could conflict with the 2018 rule. Law 13,756/2018, it is worth noting, does not provide for the granting of exemption to sports betting prize winners, with no potential conflict on this topic.
Having lost (at least until now) the opportunity to exonerate sports bettors through a new General Sports Law, a new opportunity arose, this time through the Legal Framework for Gaming, Bill 442/1991.
After several changes in its text, the draft that is currently being processed by the National Congress proposes the reduction of the IRPF rate levied on the prizes paid to winners from 30% to 20%.
The legislator goes further, proposing the calculation of the amount of IRPF due on the net gain, that is, on the prize deducted from the amount paid to bet, which currently does not 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.
Bill 442/1991 also provides that there will be exemption from IRPF if the value of the net gain is up to R$ 10,000.
As much as there may be criticisms regarding the Legal Framework for Gaming, 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 Bill 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.
Now it is up to us to follow the next chapters of this soap opera and see what end it will have, hoping that this time, the gamblers leave with a smile on their faces. Let's wait.
Rafael Marchetti Marcondes
Professor of Sports and Tax Law. Doctor and Master in Tax Law from PUC/SP. Master in Sports Management from ISDE/FC Barcelona. Specialist in Tax Law from FGV/SP. Bachelor of Laws from PUC/SP. Member of the Brazilian Institute of Sports Law (IBDD). Lawyer in São Paulo. Head of Legal at Rei do Pitaco.
