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September 28, 2021

The measure, which bases tax on GGR, has been sent to the Senate for its final approval

Brazil lower chamber approves sports betting tax rules with amendments

Brazil lower chamber approves sports betting tax rules with amendments
Deputy Hugo Motta's amendments would change the sports betting tax base to GGR.
Brazil | 06/04/2021

Changes proposed by Congressman Hugo Motta and cleared Wednesday by the deputies see that the collection after deducting income tax and prizes is considered for tax collection purposes, based on the lottery modality of fixed-odd betting.


razil's lower chamber floor approved Wednesday Provisional Measure (PM) 1,034/2021, which regulates a number of tax regimes for sports betting, the financial sector, the chemical industry and the automobile industry. The bill has been sent to the Senate for its final approval.

Amendments proposed by Congressman Hugo Motta to the bill's rapporteur, deputy Moses Rodrigues, include a change in Art. 30 of Act 13,756/2018, which has regulated sports betting since December 12, 2018, as reported by BNL Data. In Art. 6 of the Provisional Measure approved this week, the changes establish the percentages that state institutions will receive from the GGR, in addition to the tax on the license adjudication.

With the approval of the PM, the collection after deducting income tax and prizes will be considered for tax collection purposes. Therefore, it considers the payment of taxes on net revenue from collection, discounting income tax and prizes (GGR). The amendment states that, from the total collected, the prizes will first come out, without fixing the amount, the amount of the incident income tax (30%) and the social security portion (0.10% for bets on physical media and 0.05% for those in virtual environment).

“The goal is to improve sports legislation by changing the tax base to GGR,” the Congressmen explained. The tax collection from physical and virtual sports betting operations will be used to pay bonuses and redirect money to social security, health and education. "The amendments to the aforementioned legislation will allow progress towards the establishment of the lottery modality of fixed-odd betting and to have the appropriate collection for the Union,” the rapporteur explained.

Furthermore, 95% of the proceeds will cover the costs and expenses of the state entity that will be set up to control the gaming and betting sector. 0.82% would be invested in school organizations, while another 2.55% would go to the National Public Security Force (FNSP) and 1.63% to the “Brazilian sports entities that grant their rights to use their names, brands, emblems, anthems, symbols and more to promote and execute fixed odd bets.”

Last month, Rio de Janeiro began the process to incorporate new gambling products within Loteria do Estado do Rio de Janeiro’s (Loterj) portfolio. The official organization called for expressions of interest from sports betting and lottery operators seeking to take charge of the new verticals. 

The tender is aimed at attracting companies that can create betting and lottery products for both online and brick and mortar. Rio de Janeiro, along with Minas Gerais, is one of the first states to address sports betting operations and expanded gambling products. The move was prompted by a request made by state Deputy Alexandre Knoploch to authorize Loterj to operate the sports betting sector.

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