SBC News Voice of the Sports Betting Industry
The Senate of Brazil has been informed that sports betting and online gambling activities can be considered new criteria for “selective taxes.”
The determination forms part of a report filed by Senator Eduardo Braga (MDB-AM), who serves as the Rapporteur for the Senate’s federal tax reform project.
As reported by SBC Notícias Brazil, Braga’s report classifies sports betting, online games, and fantasy sports as “targeted goods and services deemed harmful to health or that generate negative externalities—such as alcoholic beverages, cigarettes, and fossil fuels.” The tax aims to include these sectors, which have been experiencing significant growth in the country.
However, taxation remains a contentious issue ahead of the launch of the Brazil Bets market in 2025, as the federal framework seeks to regulate fixed-odds betting and online gambling.
Authorised in December 2023, the tax framework under Law No. 14,790/2023 applies a general income tax rate of 12% on gross gaming revenues (GGR) for licensed operators. For consumers, a 15% personal income tax will be levied on prizes and winnings exceeding BRL 2,824 (approximately €530), upheld by an executive order from President Lula da Silva.
Although this framework has been approved, it remains subject to further scrutiny. A “Constitutional Amendment Proposal (PEC)” has been introduced to determine whether selective taxes should apply specifically to betting activities.
The Senate is expected to vote on this matter on 11 December. While no specific tax rates have been determined, discussions on “sin taxes” will continue into 2025 through the application of a “Complementary Bill.”
ANJL: Taxes are no substitute for federal controls
Concerns about the additional taxation of betting activities have been raised by ANJL, the National Association of Gaming and Lotteries. The organisation has warned that excessive taxation could push players towards illegal markets, undermining federal controls on online gambling overseen by the Secretariat of Prizes and Betting (SPA).
Dr Ana Helena Pamplona, a lawyer and consultant for ANJL, emphasised that effective taxation should “focus on efficiency rather than simply increasing rates or expanding the tax base.” She criticised the decision to tax online betting and fantasy sports beyond the fixed rate established by Law No. 14,790 as a move that “violates fundamental principles of tax law” and is “more political than technical.”
“This will burden the market and compulsive players, who will end up migrating to illegal platforms. We’ll also lose state control, which is much worse,” she argued. Pamplona further expressed concerns about the growing uncertainty surrounding tax calculations, warning that such an approach could ultimately backfire.
Fantasy Sports is deeply exposed
The application of sin taxes also threatens the viability of specific segments, with fantasy sports being particularly vulnerable. Fantasy sports are characterised by a lower addiction potential due to limited recurrence, such as the time intervals between matches.
Bárbara Teles, a lawyer and director of government relations at the Brazilian Fantasy Sport Association (ABFS), also voiced her concerns. She noted: “We received the news [of the rejection of the exemption request] with some surprise. We had hoped for a revision of the text to remove the Selective Tax.”
Teles argued that taxing fantasy sports is unjustified, as these companies are entirely digital and have no environmental impact. Excessive taxation, she warned, risks stifling innovation and hindering the growth of this emerging sector.
2005 Outlook: Bets faces fine balance on taxes
Critics argue that the proposed taxes appear politically motivated rather than rooted in sound economic or technical reasoning. Additionally, the lack of clarity and stability in tax calculations raises concerns about the sustainability of the market and its ability to thrive under such uncertain conditions.
Advocates emphasise the need for balanced policies that foster sector growth, technological innovation, and responsible entertainment. Rather than imposing punitive measures, policymakers should focus on creating a sustainable environment that benefits all stakeholders. Striking this balance will be crucial to supporting the growth of the betting, gaming, and fantasy sports industries while ensuring appropriate regulation and oversight.
