On September 13, 2023, the Chamber of Deputies approved the base text of Bill (PL) No. 3,626, which incorporates, with some modifications, Provisional Measure (MP) No. 1,182, of July 25, 2023 .
In addition to expanding the definition of a fixed-odd lottery modality – which now includes not only betting on real sports-themed events, but also bets placed on virtual online gaming events (eSports) and online betting (including online casinos) –, the PL sets the value of the grant consideration at up to R$30 million for a period of up to 3 years.
The proposal also provides for the payment of an inspection fee and mandatory transfers by regulated operators equivalent to 18% of betting revenue (excluding prizes).
One of the main motivations for this new regulation is to increase the Union’s tax revenue. However, the high costs arising from the proposed taxation could affect the competitiveness of regulated operators and, therefore, encourage the channeling of bets to unauthorized operators, harming the development of this market in Brazil.
In this scenario, not only the collection would be frustrated, but also the other objectives of the project sought by users and the main companies operating in the segment, most of them global players: promoting integrity and greater transparency, providing security to users and contributing to prevention. of illicit practices, such as money laundering and fraud in sports betting, the latter being a problem of great concern in Brazilian football in view of recent cases.
For Gelfi, high taxes direct players to the illegal market
These are the conclusions obtained by a technical study developed by Tendências Consultoria, at the request of the Brazilian Institute of Responsible Gaming (IBJR).
André Gelfi, president of IBJR, states that the objective of the work is to support dialogue on the topic with Congress, Government and society, aiming to support the sustainable and responsible development of the betting market in the country and build a safe environment for everyone.
“Data like these obtained in the study allow us to compare the context of Brazilian regulation to regulations made by other countries, where we observed that high taxes result in greater players being directed to illegal markets.”
“IBJR members believe that Brazil has the potential to be one of the largest legalized markets in the world,” added Gelfi.
However, for this to be possible, the partner and director of Tendências Consultoria, Eric Brasil, explains that Brazilian regulation must seek to achieve a level of taxation more consistent with that practiced in other jurisdictions:
“This can be done through a downward review of the percentages of mandatory allocations, inspection fees and grant amounts and deadlines. Changes may also occur in the bettor’s income tax, such as a reduction in the rate and the possibility of paying taxes on the net result calculated per period”, said Brasil.
In this sense, international experience shows that the creation of an environment conducive to the development of the regulated online betting market, with healthy competition between operators, is associated with the existence of a robust regulatory framework, which establishes the rights and obligations of participants in the market without creating excessive burden and ensuring flexibility to accommodate innovations and different business models.
The full study can be found here.
About the Brazilian Institute of Responsible Gaming (IBJR)
The Brazilian Institute of Responsible Gaming (IBJR) was born from the union of the Bet365, Flutter, Entain, Betsson Group, Betway Group, Yolo Group, Netbet Group, KTO Group, Rei do Pitaco, Novibet and LeoVegas with the aim of fostering debate on the regulation of this segment in Brazil, contributing information to defend the creation of clear rules and guidelines so that sports betting companies can operate legally, protecting the interests of players and civil society.
Currently, in addition to igaming and sports betting companies, IBJR has among its members payment companies such as Grupo OKTO and Pay4Fun, and media groups such as Better Collective.
