Legislation
Brazil – IBJR publishes study into impact of sports betting bill
By James - 26 October 2023
The Brazilian Institute of Responsible Gaming (IBJR) has once again criticised Brazil’s online gambling bill. The IBJR released a study compiled by economic consulting business Tendências Consultoria based in Sao Paulo. According to the study the proposed tax rate when combined with other taxes and fees could make the market unfeasible for many operators. This in turn could lead to illegal operators gaining a further foothold in the market.
According to the report in addition to the contribution of 18 percent of gross gaming revenue (GGR), companies must pay three other taxes: PIS, Cofins and ISS, to operate legally in the country.
“Total taxes would be around 30 percent of the GGR, considering the total volume of bets and without considering the prizes,” the study found.
According to the study published via the IBJR’s LinkedIn account:
“An online betting operator that starts operating in Brazil after the regulation may have to spend an amount of up to 68% of the GGR only for compliance with tax and regulatory obligations . . .” and could be even higher when other charges such as corporate taxes are taken into account.
“This will generate a high incentive for a group of operators to choose for continuing to operate in the Brazilian market from abroad, without the compliance with any rule in Brazil and without paying taxes.
“In this situation, even though they are recognized by the majority of users as safer and more reliable, regulated operators, inevitably, will lose market share to unauthorized ones.”
The study went onto argue that while the new bill sought to ban unauthorised operators “it is practically impossible to prevent Brazilians from continuing to bet on illegal sites located abroad. The drop in attractiveness of the regulated market and the consequent channelling of greater betting volume for illegal operators would frustrate all regulatory objectives currently under discussion.”
The Brazilian Institute of Responsible Gaming (IBJR) was established earlier this year to unite some of the leading global brands in the sports betting sector, which have joined forces in Brazil to contribute to the discussion and development of the national gambling market. Bet365, Flutter, Entain, Betsson Group, Betway Group, Yolo Group, Netbet Group, KTO Group and Rei do Pitaco are the founding operators of the entity. Combined, they operate in more than 100 countries.
