Companies, known as "bets" will be taxed at 18% on the so-called "Gross Gaming Revenue" (GGR), which is the revenue obtained from all games after payment of prizes to players and income tax (IR) on the prize pool.
In May, the Ministry of Finance had released a proposal that provided for the taxation of bets, in addition to rules to avoid manipulation of games. At the time, the government had indicated that taxation would be 16%.
Fixed Odds Betting - Consolidated with amendments from PM 1,182/2023 by GAMES MAGAZINE BRASIL on Scribd
In May, the Ministry of Finance had released a proposal that provided for the taxation of bets, in addition to rules to avoid manipulation of games.
Finance projections indicate that the government can collect up to R$ 2 billion (US$ 420m) in 2024 with the taxation of online betting. In the following years, the estimate varies between R$ 6 billion (US$ 1.26bn) and R$ 12 billion (US$ 2.52bn).
The PM amends Federal Law No. 13,756, published in 2018, which regulates the exploitation of fixed-quota lotteries by the Union, also known as “bets”.
Before, the law provided that this modality was an exclusive public service of the Union. The term "exclusive" has been removed from the text.
Now, it will be up to the Ministry of Finance to authorize the operation of these bets, "with no limit on the number of grants, with the possibility of commercialization in any commercial distribution channels, physical and virtual."
The measure establishes that companies will be taxed at 18% on the GGR, leaving 82% of the revenue for the "bets" to maintain operations. The fees were distributed as follows:
In May, the Ministry of Finance had released a proposal that provided for 16% in rates. In the PM, the government increased the transfer to the Ministry of Sport, from 1% to 3%, which raised taxation to 18%.
Under the 2018 law, taxation was up to 5% on company revenue after payment of prizes, income tax on prizes and social security contribution (which had a rate of 0.10% for physical means and 0.05% for virtual bets).
The PM also obliges "bets" to promote actions to raise awareness among gamblers about gambling addiction. It will be up to the Ministry of Finance to regulate marketing actions. Advertising can only be carried out by companies authorized by the government to operate the betting service.
According to the texts, the value of the grant will be defined in another act of regulation by the Executive. The internal estimate is that each company pays R$ 30 million (US$ 6.3m) to operate in the country for five years.
Prizes that are not withdrawn by the winners within 90 days will be reverted to Student Financing (Fies), until July 2028. After that date, the resources will go to the National Treasury.
Partners and shareholders of "bets" may not act as directors or have participation in sports organizations. Companies will also have to report suspected events of match-fixing to the Ministry of Finance.
Companies operating betting are prohibited from acquiring, licensing or financing the acquisition of rights to sporting events held in Brazil for broadcast, distribution or any other form of display of sounds and images, by any means.
The authorization to operate in Brazil leads to the implementation of gaming houses, advertisement/commercial disclosure and also the regular payment of taxes.
Based on the amounts obtained by exploiting the games, companies must first pay the prize to the player, then deduct federal taxes (such as Income Tax and PIS/Cofins), as well as local taxes (such as ISS).
Source: GMB
