Brazil’s Senate passes sports betting bill with amended tax rate

Alterations to bill PL 3,626/2023 include slashing the duty paid by operators from 18% to 12% and halving the controversial winnings tax  

Brazil took another major step towards regulation after its Economic Affairs Commission (CAE) approved bill PL 3,626/23 yesterday, 22 November.

The vote was originally set for 21 November but was postponed for 24 hours by the CAE following requests from two of a number of senators opposed to the bill that it be delayed for a week.

Nevertheless, the vote went ahead on Wednesday and its approval by the CAE gave it greenlight to be passed to the Brazil Senate plenary later this month.

As part of the approved text, the GGR tax rate imposed on operators was reduced from 18% to 12%, while the attempt to remove online gaming from the legislation was rejected.

It was also agreed that there would an amendment to the distribution of funds from fixed-odd betting lotteries. The text states that 88% will go towards funding for the country’s lottery operators and “other betting games” while the remaining 12% will be split between several departments including sport, tourism, education and social security.

Meanwhile, the proposed tax of 30% on players’ winnings – a legacy of the lotteries in Brazil – has been cut from 30% to 15%.

Operators had been calling for this tax to be cut entirely or, as a compromise, applied to just withdrawals rather than on every winning bet, including the stake, as they argue it plays into the hands of the black market.  

Taking to social media platform X, formerly known as Twitter, Senator Angelo Coronel confirmed the approval of the mandate and the next stage of the process.

He wrote: “We recently approved my report on the PL that regulates sports betting in the Senate’s Economic Affairs Committee, and now the text goes to the plenary on an urgent basis.”

The Senate plenary vote is due to take place on 28 November, during which the formalisation of sports betting and igaming in Brazil will be further considered.

If the plenary approves or alters bill 3,636/23, it will return to the Chamber of Deputies for further review.

One senator opposing the bill was Eduardo Girão, who said: “It is an extremely serious issue, which impacts less privileged people. We need to be very careful when legislating.

“It’s not in a rushed way. Everyone is appealing for there to be no ‘treatment’. The impact will be on the Brazilian, who is there at the top receiving brainwashing to play and become addicted.

“He loses his motorcycle, car, house, job, family and even his life.”

Senator Girão’s request for postponement was echoed by fellow Senator Carlos Portinho, who added: “There is no urgency. We are learning about the report now. I’m not going to discuss whether they were breached or not, but there are points that were discussed – I’ll put it that way – and were not attended to.”

Brazil’s lower house initially approved PL 3626/23 on 13 September, after president Luiz Inácio Lula da Silva gave his approval in July for the regulation of sports betting.

EGR recently explored sports betting and igaming regulation in Brazil and the opportunity ahead by speaking to lawyers and operators in the South American country.

 

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