Brazil inches closer to GGR sports betting tax regime
Changes put forward by Congressman Hugo Motta will see South American market shift to GGR-derived tax base
The Brazilian government is set to make a significant amendment to its sports betting legislation that will see tax collection calculated based on gross gaming revenue (GGR).
Provisional Measure 1,034/21 was approved on 2 June and saw proposals from Republican politician Hugo Motta given the green light after being accepted by rapporteur Moses Rodrigues.
The changes will see the country’s mooted sports betting tax shift away from a fixed percentage of profits to a GGR-based tax system for fixed-odds betting.
Motta said: “The concept must be different: it is a betting system related to sports-themed events, in which it is defined, at the time of placing the bet, how much the bettor can win in case of correct prognosis. This amount is related to the amount bet and not to the proceeds.
“The form of taxation needs to be adequate to be established due to the difference between collection and paid prizes. The amendments to the aforementioned legislation will allow progress towards the establishment of the lottery modality of fixeds-odd betting and to have the appropriate collection for the Union,” he added.
The changes, which impact article six of law number 13,756/2018, establish which percentages state institutions will receive from the new GGR tax.
The vast majority (95%) of proceeds will be used to cover the cost and maintenance of the state body in control of the sector, which is still to be properly established.
Additionally, 2.55% of proceeds will go the National Public Security Force, 1.63% to Brazilian sports teams that license their branding to promote betting and 0.82% invested into the education system.
The amended bill has been passed onto the Brazilian Senate, where it will be discussed further.