In summary, the institution says that, if the project gains the force of law with its current wording, it will make it impossible for betting companies to operate in Brazil. If companies close their doors, bettors could start using unauthorized platforms, which would frustrate the Lula government's plans to raise funds by taxing this activity in the country.
According to the IBJR study, the total tax burden proposed by the bill, considering only indirect taxes, would be up to 29.69%. For this calculation, they consider: the 18% tax, applied to the difference between revenue and prizes; payment of ISS, which varies from 2% to 5%; and payment of PIS/COFINS, 9.25%.
The survey also points out that, due to other fees required from the sector, such as the grant of R$ 30 million (US$ 5.95m) for a period of 3 years, the estimated tax and regulatory cost for the company varies from 33.4% to 67.9% of the difference between the collection and payment of prizes.
The IBJR study also points to an impact on the sports sector. It says that, in 2023, bookmakers sponsor 69% of the clubs competing in the four divisions of the Brazilian football championship.
“As this is a highly competitive market, it is reasonable to assume that margins are not high enough to allow operators to simply absorb these costs, without passing them on to consumers. In other words, a cost impact of this magnitude, without compensation through increased revenue, will make it unfeasible for any online betting company to operate in Brazil,” says an excerpt from the document.
Source: Estadão
