Online sports betting will be taxed, Senate decides

According to the text, bets on the results of real sporting events, such as football and volleyball matches, will now pay tax.

Approved by the commission, the text provides for 12% taxation on the revenue of companies that operate this type of bet. In the original proposal, the government intended to charge 18%, but the rate was reduced by the rapporteur, senator Ângelo Coronel (PSD-BA), in the Senate's Economic Affairs Committee.

Companies will also have to pay a grant of up to R$30 million to operate legally for five years, with the same company being able to pay the amount to operate up to three commercial brands. The original text stipulated renewal every three years.
Bettors will be taxed 15% on winnings that are above the Income Tax exemption, currently at R$2,112. Initially, the government intended to charge 30%.

The project is also part of the government's package to eliminate the primary deficit in 2024. Throughout the year, the revenue estimate varied. At the beginning of the year, the government expected to raise R$3.2 billion this year and R$6 billion in 2024.

With the delay in voting in 2023, the forecast for 2023 was reset and fell to R$700 million in 2024. With the changes in the Senate, the estimate could be further reduced.

After approving the base text, the Plenary approved a highlight, by senator Carlos Portinho (PL-RJ) to reinforce the prohibition on the regulation of online events, not linked to sports matches. The measure maintains the illegality of online casinos and further dehydrates the government's project.

During the proceedings at the Economic Affairs Committee, the senators included requirements for sports betting companies to operate in the country. They must have at least one Brazilian person as a partner, who holds at least 20% of the share capital.

Furthermore, the partner or shareholder cannot have direct or indirect participation in football corporations, nor be a manager of a sports team in Brazil. They will also not be able to work in financial and payment institutions that process fixed-odd bets.

With information from Agência Brasil.