May 1, 2023
Recent news from Brazil says that the government is proposing a 15% tax on sports betting. That's not all; the new proposal will introduce a BRL30 million ($5.9 million) license fee.
Thankfully for regulated online sports betting sites in the country, the Ministry of Sports has postponed the proposal, as reported by local media. This new proposal calls for an increased tax rate of 16% on online sports betting gross gaming revenue (GGR). In March this year, the Minister of Finance, Fernando Haddad, announced Brazil will soon tax online sports betting.
The proposed 16% tax rate would be composed of the following charges:
Under the new proposal, Brazil's Ministry of Sports will retain 1% of the sports betting tax revenue. The proposal also says the Ministry of Sports will allocate the funds to various causes, including 0.82% to educational initiatives.
Early predictions suggest that the nation's coffers will gain a sizeable increase from the taxes generated by sports betting. The Minister of Finance, Fernando Haddad, recently forecasted that the revenue from sports betting, with the proposed 15% tax rate on gross gaming revenue, could reach BRL15 billion ($2.96 billion).
Following the proposal, the government seeks to be on par with other regulated markets worldwide that are reaping big from regulated sports betting. For example, the taxation rate for legal sports betting is not uniform in the United States as it varies between states where betting is regulated.
Betting in the US started flourishing after the Supreme Court ripped apart PASPA (Professional and Amateur Sports Protection Act) in 2018, citing discrimination. This move left the fate of sports betting under the respective state lawmakers responsible for formulating gambling laws. Sports betting is currently legal in 25+ states, whereas online casino games are allowed in at least six states.
Consequently, some states only allow retail betting, whereas others allow both mobile and retail sports wagering. Unsurprisingly, each state's taxation rate is different and can also be different for mobile and sports betting. It's expected that Brazil may try to borrow the same regulatory model.
The taxation scheme recently proposed in Brazil is currently under discussion by the relevant stakeholders, and it's still unclear when the proposals will become law.
Matteo "Teo" Bianchi, hailed as BettingRanker's "Data Dynamo", is the quintessential combination of a sports enthusiast and a numbers whiz. His meticulous research ensures bettors are always a step ahead, making him a cornerstone of the platform.