Note from the National Association of Games and Lotteries (ANJL)
The National Association of Games and Lotteries (ANJL) expresses concern regarding the possibility of implementing a “selective tax” (or “sin tax” as it is konwn in Brazil) for the sports betting and online gaming market, as has been considered by politicians and technicians who are part of the Tax Reform regulatory process (Complementary Bill 68/2024). The measure could render the entire sector regulation process ineffective, as it tends to encourage the illegal market.
Law 14,790/2023, which regulated this market, set a tax rate of 12% on Gross Gaming Revenue (GGR, i.e., the difference between the total volume of bets and the value of prizes paid) after intense coordination between the sector and to the National Congress.
Over the past year, ANJL demonstrated to congressmen, through studies and data, that a heavy tax burden (the original proposal predicted 18%) would only drive away serious betting houses that wish to operate in the country in a regulated manner and, at the same time, time, would cause illegal websites to proliferate even more in the country.
International examples show that the greater the weight of taxes, the less channeling through authorized sites and, therefore, the greater the channeling through irregular sites.
Considering the new taxes (IBS and CBS) foreseen in the Tax Reform, the sector's tax burden in Brazil should reach 32%, one of the highest in the world. This is without considering the millionaire payment of grants to the Union – and, depending on the operators' decision, to the states and the Federal District – and the incidence of 15% Income Tax on bettors' net prizes.
Inverse effect
In this scenario, the institution of a “sin tax”, under the argument that it is an activity harmful to society, will cause exactly the opposite of what was desired: the abstention of companies that would collect taxes from operating in Brazil and the advancement of websites operating under complete illegality.
Without collecting any taxes, these companies will attract players and will not return any resources to the State that could be used precisely in actions and tools to prevent ludopathy. It is noteworthy that Law 14,790 already provides for the allocation of resources, arising from the payment of 12% on the GGR, to the Ministry of Health, for measures to prevent, control and mitigate social harm arising from gaming.
ANJL therefore expects common sense from both the National Congress and the Executive Branch, in addressing this issue, so that Brazil does not drive away betting houses committed to the respect and health of bettors and attract irregular ones, which they will act outside the law and the tax system itself.
National Association of Games and Lotteries (ANJL)
