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Brazil Will Soon Revert To 3% Turnover Tax For Sports Betting

The Brazilian government looks set to impose a 3% turnover tax on approved betting operators, as opposed to the 1% cut proposed in a draft presidential decree published earlier this year.

This is due to the 3% limit included in Law No. 13,756/18, the bill passed in December 2018 that legalized sports betting and provided a two-year period for the legislature to implement legislation, according to a legal source close to the matter.

The presidential decree setting out the sports betting rules can not circumvent the statute, resulting in the tax rate returning to the original amount, clarified the legal source of iGamingBusiness.com.

Operators will also be required to pay a premium of R$3 m (£ 546,135/€655,360/US$730,332) for a nine-year license, with monthly fees for online and land-based networks varying according to the draft presidential decree published in September. Retail operations must pay a monthly fee of R$20,000, which online amounts to R$30,000. All involved on both channels receive a R$5,000 discount, however, and pay R$45,000 a month.

This seems, however, that an item referred to as a “quarantine” clause in documents-but to the industry as a bad actor clause-will be eliminated. This would have blocked entry in the regulated market by any operator already operating on the Brazilian market.

Operators will still be required to sign a disclaimer claiming that they have not been involved in any illegal activity in the country’s sports betting or lotery vertical.

It also appears that it may be possible to increase the bond operators to BRL18 m in order to secure their license. This was originally set at BRL6 m to ensure that licensees are provided with the funds necessary to pay players winnings.

Operators will also be forced to hire an approved testing company to verify compliance with Brazilian law for their facilities, channels and methods of payment processing.

The legal source indicated that the presidential decree will be issued next year in January, most likely in the second half of the month. Six months after it is published in the country’s Official Gazette, it will finally come into force.

Source: https://www.igamingbusiness.com/news/brazil-set-revert-3-turnover-tax-sports-betting

About the author

Eshlin Vedan

Eshlin Vedan

Eshlin Vedan is a professional Journalist from South Africa. He loves writing about Sports especially cricket and football/soccer. Eshlin is a neutral when it comes to club football. He is especially fond of the English Premiership and his favourite part of the season is the relegation battle.

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