The Ministry of Finance revealed that it is about to complete a provisional measure aimed at taxing online sports betting, which will impose the condition that the companies in charge of these games have their headquarters in Brazilian territory. In addition, the government also intends to establish strict control mechanisms to prevent fraud and match-fixing.
Before being published, the text will be forwarded to the Civil House for analysis. Once in force, the government will issue ordinances and other administrative acts to improve the regulation and ensure the effective application of the rules.
In an official note, the following was said: “The regulation will require betting companies to be headquartered in Brazil – since they are currently abroad –, improving inspection, collection and dialogue with the agents that operate in the sector”.
According to two Ministry sources, there is still no definition as to the measure’s impact calculations, and estimates range from R$ 2 billion to R$ 8 billion in increase in government revenues annually.
The Ministry has not disclosed information about the type of taxation that will be implemented or the rates that will be applied. During the administration of former president Jair Bolsonaro, a law was passed that established the collection of social contribution on these games, but the current government argues that this taxation was never implemented.
The ministry also added: “The lack of regulation and collection of fees also meant that Brazil failed to structure and maintain a network for monitoring suspicious behavior, with penalties for those responsible, protecting the sporting integrity of situations such as attempts to manipulate game results.
In the case of fixed odds bets, the player seeks to predict the outcome of sporting events, such as the score, the number of yellow and red cards, the scorers and player substitutions. When placing the bet, the bettor is already aware of the amount he can win if he is right, by applying a multiplier to the bet amount.
Although sports betting was legalized in 2018, the lack of regulation on how the law should be applied resulted in a sector without clear rules to be followed and without taxation, according to the Treasury.
