The Lula government's provisional measure to regulate the exploitation of sports betting is important and came at a good time, but it is necessary to discuss the increase in the tax burden that it generates in the sector, at the risk of making the activity unfeasible. The opinion was given to Bahia Notícias by federal deputy Bacelar (PV-BA), regarding PM 1.182/2023, published last week in the Official Gazette.
The PM amends Law 13,756/18, which regulates the operation of fixed-quota betting lotteries by the Union. With the new rule, these bets will be taxed at 18% on top of GGR (gross gaming revenue), gross revenue obtained from all games after payment of prizes to players, in addition to Income Tax on the prize.
In conversation with news outlet Bahia Notícias, deputy Bacelar congratulated the federal government for issuing the provisional measure. He recalled that Law 13,765, sanctioned in 2018 by then President Michel Temer to discipline the sports betting market, had a four-year period for the government to regulate the sector. This deadline expired on December 13 of last year, with the Bolsonaro government failing to regulate.
“We want to congratulate the government, we are happy, it is a measure that should have been adopted more than four years ago, and it was not done due to negligence, due to the hypocrisy of the previous president, who did not regulate this sector as the law required. This caused the Brazilian state to stop collecting, and also the gambler, the citizen, did not have the due protection. And above all, it generated all the problems we had with the manipulation of results. These problems were due precisely to the lack of inspection by the Brazilian state,” said the deputy from Bahia.
Deputy Bacelar said he considers that the text of the provisional measure, although welcome, is comprehensive and has gaps that have not been filled. Bacelar stated that the taxation imposed on the sector by the measure raises the tax burden of 32% on the activity, which, for him, could make the betting market unfeasible.
“I thought that the measure has many gaps to be discussed, mainly the tax burden that the PM generates on the activity, which practically makes the business unfeasible. If the provisional measure is approved, we will have a tax burden of 32%, which is unprecedented in the world. In international markets, this percentage is around 20%. We are going to start discussing the provisional measure, but also discussing the constitutional urgency project that seeks to cover these gaps," explained the deputy.
"We can also vote in parallel on other projects that deal with the subject, such as the one that has already been approved in the Chamber and is now in the Senate, and that allows the State to control, collect and regulate the practice of betting throughout the national territory," said the deputy.
Bacelar led the Parliamentary Front that created the Regulatory Framework for Gaming in Brazil, as well as coordinating the Working Group in the Chamber responsible for improving Bill 442/91, which creates the Regulatory Framework for Gaming in Brazil. The deputy from Bahia, when criticizing the taxation imposed on the sector by the text of the PM, for him “excessive”, listed three consequences in the medium term if the measure is approved the way it was edited.
“What can happen? First, the decrease in the value of the prize. The operator, when its costs decrease, increases the value of the prize, which can alienate the bettor and reduce the volume. Second, we may be discouraging revenue collection. Third, we can stimulate illegal gambling, bookmakers that operate the black market, outside the law and that will not be reached by the measure,” explained the parliamentarian.
The expectation of the economic team of the Lula government is to obtain a collection of up to R$ 2 billion (US$ 425m) still in 2024, an amount that could reach a total of R$ 12 billion (US$ 2.55bn) in the remaining years. The provisional measure began to take effect as of last Tuesday (25th), and has a period of 120 days to be voted by the National Congress.
Source: Bahia Notícias
