Brazil greenlights bill taxing online betting

Since President Luiz Inacio Lula da Silva assumed the presidency in January this year, displacing his cantankerous predecessor Jair Bolsonaro, the government has been on a clear path to plug the budget deficit and ensure that additional tax windfall is found.

This is happening now with the gambling industry to be finally legalized and levied with a tax that allows the country to cover various public purse expenses while creating a regulated framework for what could be one of the world’s biggest gambling industries.

The new gambling taxation was voted on and passed on Friday by the country’s lower house, with the bill effectively confirming previous expectations about a 12% revenue tax on all online betting operations, along with 15% payable by gamblers on their winnings.

Sports gambling has in fact been legal in Brazil since 2018, but the country has lacked proper regulation, as Bolsonaro’s administration proved lethargic on the matter and has mostly been busying itself with surviving the 2022 Presidential race, which it lost.

Regardless, the lack of a clear framework has not really stopped companies, from Betfair to Betano, to bet365, along with many suppliers, from planting their banner and pushing into the country’s market, bringing their overseas offers and getting an early-move advantage in the market.

Sports gambling and iGaming are both proving to be lucrative market opportunities for operators and businesses that are keen to get a move on. Even the taxation rate is not worrying them as of right now, although the 15% payable by companies may not be a final number as the industry matures and as experience from other markets has indicated.

Before the new taxation rate is introduced, however, President da Silva will need to promulgate it by signing it off. However, da Silva has already established himself as a firm supporter of the bill, and his Minister of Finance has repeatedly insisted that the regulation of sports gambling would in fact bring in much-needed tax revenue.

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