Brazil Sports Commission to hold hearing on proposal for gambling advertising ban

There have also been calls for new gambling tax legislation amid doubts over how tax should be collected on player winnings.

Brazil.- The Sports Commission (CEsp) will hold a public hearing to discuss Bill 2,985/2023, which proposes a ban on sports betting advertising, and Bill 3,405/2023, which would prohibit athletes and celebrities from promoting betting platforms. Requests for the hearing were presented by senators Carlos Portinho (PL-RJ) and Jorge Kajuru (PSB-GO).

Bill 2,985/2023 was presented by Styvenson Valentim (PSDB-RN), while Bill 3,405/2023 was introduced by Eduardo Girão (Novo-CE) and would prohibit the advertising of sports betting by teams, athletes and former athletes, presenters, commentators, celebrities and influencers. With the approval of the request for a hearing, the bills were not voted on last week and will continue to be debated until the hearing.

Senator Portinho requested that the debate take place in April, preferably in the Senate Plenary, and that representatives from all sides be invited. The date has not yet been set.

Doubts remain over tax regime for online gambling in Brazil

Meanwhile, the special secretary of the Federal Revenue Service, Robinson Sakiyama Barreirinhas, has defended the tax regime for online gambling in Brazil. Speaking to the Parliamentary Commission of Inquiry (CPI) that’s investigating the new regulated market, which launched in January, he defended the tax on player winnings.

“My position is that gamblers should pay income tax, because the tax, in this case, does not have a revenue-raising function, it has a dissuasive function, of not encouraging gambling,” he said. “It is like this all over the world. We are treating gamblers better than we treat a company with real profits in Brazil. It is crazy.”

The committee’s rapporteur, Senator Soraya Thronicke (Podemos-MS), has suggested that the National Congress change the legislation on online gambling to increase taxation on some verticals sector. “The more harmful the product, the higher the taxation should be. I am shocked by the 12 per cent taxation on gambling activity,” she said.

Law 14,790/2023 imposed a 12 per cent tax on gross gaming revenues (GGR) for licensed operators and a 15 per cent tax on player prizes exceeding BRL 2,824 (approximately €530). Barreirinhas was cautious when providing an update on tax collection, stating that authorities would get a “clear picture in six months”. Receita Federal has assigned a team to analyse the data submitted by companies.

As for unaccounted taxes from before the start of the regulated market, Barreirinhas says lost duties could amount to BRL 3bn (€3.3m). The final figure will be confirmed by Receita Federal, but the possibility of retroactive taxes for operators that were active on the Brazilian market from 2018 to 2024, before regulation, remains contentious.

Barreirinhas stated: “In my opinion, those who were physically present in the country, materially or informally, are accountable to Brazilian tax authorities.” Retroactive taxes could be difficult to apply to foreign operators active before regulatory oversight, but Barreirinhas suggested that legislation could be imposed to make agents and services that facilitated transactions accountable. However, some argue that operators that have received licences should not be penalised for having transitioned to the regulated system and should not be hit with sudden changes in regulations.

Barreirinhas is of the opinion that Brazil needs a specific new law on gambling taxation, which would define how players are to pay the 15 per cent income tax on winnings. Receita Federal has suggested that income tax payments should be withheld at the source by gambling operators, which is what happens with the taxation of lottery prizes, but Congress wants consumers to document online gambling winnings as part of their annual Personal Income Tax (IRPF) filings.