Brazil to propose sports betting tax regime

Mnister of Finance, Fernando Haddad
Mnister of Finance, Fernando Haddad

Brazil aims to replace income losses from the new income tax table by taxing federal sports betting.

Brazil.- Minister of Finance Fernando Haddad has suggested that a proposal to tax sports betting could be forthcoming as soon as this month. According to Agencia de Noticias Brasil, The ministry aims to use sports betting tax to make up for losses of revenue resulting from a proposed update of Brazil’s income tax (IR) table.

“We updated the income tax table, and this results in a small loss. But we are going to compensate for that with taxes on electronic gaming that does not pay taxes,” the minister said. “Such gambling is taxed all over the world.”

Although in the interview the minister referred to electronic games, the Ministry of Finance says that Haddad was referring to online sports betting. The ministry is finalising its proposal to correct the tax table, one of President Lula da Silva‘s campaign promises.

Lula told CNN that the government intends to increase the exemption limit from R$1,904 (USD365) to R$2,640 (USD506), the equivalent of two minimum wages, starting in May. That would reduce government revenue by R$3.2bn (USD613.3m) this year.

Sports betting launches in Minas Gerais

Brazil has yet to implement regulated sports betting at the federal level, but the state of Minas Gerais has decided to go ahead with its own local launch. The state-owned lottery operator Loteria Mineira (LEMG) has launched an app and the website on a 120-day trial basis.

The state government granted LEMG first rights to test the operation of a licensed sports betting platform. Customers certified via Brazil’s CBF registry may bet on sports and play instant lottery and keno. A promotional message on the site describes it as “the first licensed platform in Brazil” and states that “What you play with stays in Minas Gerais!”.

Located in southeastern Brazil, Minas Gerais is the country’s second most populous state in Brazil with a population of more than 20 million. Its decision to launch its own independent gambling market comes as Brazil’s federal sports betting legislation awaits sign-off. The Finance Ministry is said to have prepared the text of a provisional measure, which is expected to reach President Lula da Silva in the coming days.

Two other states – Rio de Janeiro and Paraiba – have also begun steps to launch their own independent sports betting regimes. Hazenclever Lopes Cançado, president of the Rio state lottery, Loterj, told ICE London’s VOX 2023 – World Regulatory Briefing this month that the state would open its planned fixed-odds betting tender in “approximately 120 days”.

See also: Brazil: new Embratur president leans towards gambling regulation

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