The project brings changes in relation to the text approved by the Chamber of Deputies. The changes I mentioned were very well received by operators and bettors.
In addition to the corporate taxes that all companies normally pay (IRPJ, CSLL, PIS, COFINS, ISS and IOF), operators should pay an additional 18% of the GGR, the Gross Gaming Revenue (something equivalent to gross revenue). A value far above world markets, which are positive references and which made the Brazilian market highly uninteresting.
This issue has been resolved. The 18% dropped to 12% of GGR and this change puts Brazil in the position of a highly attractive market for operators, which should cause the number of companies interested in coming and setting up in the country to grow considerably.
Another important change was in relation to the inspection fee. Initially charged progressively on the value of the prizes distributed, it reached abusive levels, so high was it originally proposed.
The inspection fee will continue to be calculated progressively, but now based on the value of the GGR, on a more modest basis and consistent with the cost that the operation should generate for the Federal Government.
In the tax field, another factor was decisive in bringing optimism regarding the Brazilian betting market: the reduction in taxation on prizes won by bettors. Income tax was reduced from 30% on all prizes paid to 15% and, better yet, will fall on the result of compensation of the player's losses and gains within a period of one year. Something similar to what is already done in day trade operations and with investment funds.
This point is key, as it helps retain bettors within the regulated market. Very high taxes on prizes encourage bettors to go after unregulated companies in the parallel market, which is not good for anyone. The regulated operator loses customers, the Federal Government loses revenue, the bettor loses security.
Great progress made by the Federal Senate on the topic. And here it is worth highlighting the work done by the rapporteur of the matter at CAE, Senator Ângelo Coronel (PSD-BA), who knew how to listen to the various people involved in this market and, more than that, had the courage to implement the necessary changes.
Small adjustments are still necessary, but these are specific adjustments that can be made in the Plenary and should not result in a deviation from the route.
But not only that. The Brazilian market also appears to be a promising market, largely due to the commitment of the Federal Government and its parliamentary base that provided support so that legislative changes could be implemented in the text of Bill 3626.
In the Executive, the Ministry of Finance has shown itself to be a valuable interlocutor, open to suggestions and criticism, and always concerned with creating a strong market and concerned with protecting all links in the chain.
Integrity of the sport, of the bettor, prevention of money laundering, advertising control are some of the flags correctly incorporated by the technical team that is heading this project.
The professionals there are eager to learn and understand more about this sector, which is still new to us Brazilians. Exciting to see this. Learning will be constant. Regulation appears as a living being, in eternal adaptation.
We are still just at the beginning of a long journey, which today is very promising. We, human beings, have a tendency to highlight mistakes a lot, which is part of it. But we cannot stop praising the successes.
Congratulations to the Legislative and Executive Power – led by the Ministry of Finance – for the work and commitment put into the betting market, the future is exciting. May the regulatory process be concluded in the way it has been (well) conducted so far!
Rafael Marchetti Marcondes
Professor of Sports, Entertainment and Tax Law. Doctor and master in Tax Law from PUC/SP. MBA in sports management from ISDE in Barcelona/ES. MBA in sports betting management from Ohio University/USA. Chief Legal Officer at Rei do Pitaco. President of the Brazilian Fantasy Sport Association (ABFS). Legal director of the Brazilian Institute for Responsible Gaming (IBJR). Director of Government Relations at the Brazilian Association for the Defense of Sports Integrity (ABRADIE).
Source: Lei em Campo
