Brazil's Ministry Of Tourism Wants Slice Of Sports-Betting Tax Pie

August 24, 2023
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The Brazilian Ministry of Tourism is the latest government body to suggest that it should be getting a cut of sports-betting tax revenue.

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The Brazilian Ministry of Tourism is the latest government body to suggest that it should be getting a cut of sports-betting tax revenue.

Tourism minister Celso Sabino said this week that he will be negotiating with Congress to ensure that his ministry receives a portion of the revenues to be generated by licensed sports-betting platforms.

Sabino was vague about just how much he wants, but told local media that the government and operators themselves had money to spare given that “around the world, this sector is taxed at a much higher rate, 40, 50 percent”.

In contrast, operators represented by the industry-led Institute of Responsible Gaming are lobbying for lowering taxes, gravely concerned about a rate that nears or exceeds 30 percent of gross revenue when all is said and done. As things stand, operators face paying a headline rate of 18 percent of gross revenue plus a further 10-plus percent in social security and municipal taxes.

An initial draft law prepared by Brazil's government earlier this year would have established a tax rate of 16 percent until the Ministry of Sport successfully lobbied for an increase from the 1 percent it was initially allocated to 3 percent.

Other bodies that want more betting tax revenue include the Ministry for Racial Equality, as advocated for by football legend-turned-senator Romário. In one of his submitted amendments to the government's so-called provisional measure emergency law, he asked for 0.5 percent for his project.

It is just one example of many that have flooded in asking for more money for specific causes.

In other Latin American countries, with Peru being a prominent example, the Ministry of Tourism runs the oversight of gaming.

Otherwise, Brazil remains suspiciously quiet about the status of the provisional measure and an accompanying sports-betting bill to implement an original 2018 law authorising fixed-odds sports betting.

A rapporteur for the provisional measure has yet to be appointed, while a joint Chamber of Deputies and Senate commission formed to review the legislation lacks powerful appointees who onlookers would expect for any measure that was going to be taken seriously.

The lack of activity all but confirms officially that the provisional measure will be left to expire, while its text is copied and pasted into the accompanying sports-betting bill.

“Currently, it seems that the PM [provisional measure] will lose effect,” said Rafael Marchetti Marcondes, legal director at Brazilian fantasy-sports operator Rei do Pitaco.

That bill, which is an urgency bill, has yet to have the clock start on it. Each house of Congress will have just 45 days to debate it, but the countdown does not begin until Chamber of Deputies Speaker Arthur Lira says so.

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