A survey carried out by the British consultancy H2 Gambling indicates that bookmakers in Brazil will have, as net revenue, only 50% of the amount that the Ministry of Finance estimates to collect from the Sports Betting PM. In total, the amount expected by the government is five times greater than the sector’s projections.
In the projections of the Ministry of Finance, next year, R$ 15 billion will be obtained in sports betting taxes, according to the Column Olhar Olímpico of Portal Uol. The H2 survey calculates that this amount does not reach R$ 3 billion, already including the ISS (municipal tax).
The Sports Betting MP is in the Civil House and should be published soon, defining taxation on the so-called GGR (Gross Gaming Revenue). GGR is the difference between what a house earns from betting and what it pays out in prize money.
The Brazilian Responsible Gaming Institute (IBJR), an organization that brings together the main companies operating in the country, calculates a GGR of 7.18% as a “reasonable average”. Taxes are charged on top of the GGR.
According to a study by H2, Brazil is close to moving about 100 billion reais, totaling almost 7 billion reais in GGGR next year from a 20% tax. And lower with higher taxation, which should be the case.
Also according to Column Olhar Olímpico, this amount will be subject to taxes common to all companies (ISS and PIS/COFINS), a 10% tax on GGR (referring to the sports betting sector), and another 5% for sports , public safety and education, already provided for in the 2021 law. Subsequently, income tax and CSLL are still levied on profits.
Not counting the state ICMS, it would already be a tax burden of approximately 34% of the GGR. Taking into account the projection of BRL 6.9 billion, it would be a collection of BRL 2.3 billion in taxes.
In addition, the government must create a tax for players, within the same rule that encompasses national lotteries. Profits from each bet that exceed the Income Tax exemption range will be taxed at 30%. Initially, this would reach 11% of the GGR (BRL 760 million), however, the amounts were based on the IRPF exemption range of BRL 1,903.98, which rose to BRL 2,111.
Sports Betting MP
Professional gamblers have manifested themselves on social networks. They claim that the taxation on them cannot be similar to the Mega Sena, for example, because the betting is different. For bettors, it is in this withdrawal, when the amount leaves the account at the bookmaker and enters the bank account, that taxation should occur.
Bookmakers and bettors believe that the Sports Betting PM can encourage irregular merchants to join. The IBJR shows the same information from the Ministry of Finance in the Finance Committee of the Chamber of Deputies a month ago.
In the United Kingdom, where the GGR is levied at 15%, 95% of the betting market takes place on regulated platforms. By contrast, in France, where GGR is high at 55%, only 60% of the market is formal.
The government cited the UK as an example and claimed it was proposing a 15% tax on the GGR but left out of account other taxes that fall on all companies. Bookmakers project that the tax burden will be 40%, similar to that of Greece, where taxation is 35% and only 69% of the sector is duly formalized.
