Bad Brazil Sports Betting, It Ain’t Over ‘Til The Taxman Scores
So finally, after being left in limbo in the dying days of former president Jair Bolsonaro’s outgoing administration, legalised sports betting is back on the Brazilian iGaming buffet.
We can deduct as much from a draft proposal signed this week by the country’s new President Luiz Inácio Lula da Silva and his Finance Minister Fernando Haddad, which recommends that a 15 percent gross gaming revenue (GGR) tax be levied on all sports betting activities.
Sports mad Brasil, home of the Beautiful Game, and some of the most fanatically supported football clubs on the planet, has been living in the grey and murky demi-monde of dodgy offshore betting channels since sports betting was agreed, in principle, way back in 2018.
Impending legislation is going to bring the baby back onshore, under strict regulation and subject to much-needed tax by the South American behemoth’s Covid19-hammered economy.
The Lula-Haddad duopoly proposes a UK-style betting tax regime, one where GGR is defined as gross income, minus customer winnings.
Individual sports betting licences, moreover, will be subject to a fee of Brazilian Real (BRL) 30 million for a five-year validity (£4.82m/US$5.98m/€5.49m).
All of which represents a big increase on the original proposal of a six percent tax on retail revenue, and eight percent tax on online revenue, when the sports betting bill was first mooted.
Another big hurdle to clear will be the agreement of Brazil’s top football clubs in Rio de Janeiro and São Paulo to settle on their share of the betting spoils.
With football dominating the sports betting scene, accounting for some 70 percent of total revenue, it’s understood that Rio’s Botafogo, Flamengo, Fluminense and Vasco de Gama clubs and São Paulo’s Corinthians, Palmeiras, São Paulo and Santos teams are looking for at least four percent of gross revenues to be distributed to the nation’s football leagues – more than double that promised under 2018’s sports betting Law 13,756/18.
Finance Minister Haddad believes that a new tax regime for sports betting and instant games could net Brazil’s government approximately BRL 12 billion a year in taxes (£1.93bn/US$2.39bn/€2.19bn).
With the new proviso that all sports betting firms must be based onshore in the country, Brazil, population 215 million, could now have legal, regulated sportsbooks by the start of May.
“Loose regulation has allowed the business to grow untaxed and lawless,” a high-level source told iGamingFuture.
“Regulation will require that betting companies are based in Brazil. We aim to improve the supervision, collection and dialogue with the agents that operate in the sector.
“Reform can help crack down on money laundering, manipulated results and help penalise those responsible.”