In December 2018, Brazil got a new law that has been regulating sports betting since. However, taking a lesson from Europe, the law is set to get an upgrade in 2021, as the Plenary of the Chamber of Deputies of Brazil has approved changes to tax regimes regulating the sports betting industry.
The new regulations aim to change the tax base to GGR. According to congressman Moses Rodrigues who proposed the modifications, by changing the tax base to gross gaming revenue, lawmakers predict that it will improve the sports betting legislation in the country. Additionally, the tax that is collected from both virtual and physical sports betting operations will be used to pay bonuses, as well as health, social security, and educational programs.
Moses Rodrigues also mentioned the fact that it was Europe’s experience that showed why it is better to use sports bettings’ gross profit as a basis – it will provide more stable public revenue and better use of services provided by local sports betting operators.
The Use of Taxes
It is important to note that 95% of the money collected from taxes will be used for covering the costs and expenses of the state authorizations that are responsible for controlling the betting and gaming sectors. Another 2.55% will be used for the FNSP (also known as the National Public Security Force), 0.82% will go to schools, and the remaining 1.63% can be used for sports entities in Brazil for the right to use their names, symbols, and brands.
The bill is still awaiting final approval from the Senate.