Brazil Sports Minister backs 16% GGR tax rate 

Brazil’s government is yet to settle on the final criteria of its pending tax framework for a federal sports betting regime. 

As reported by local media, Sports Minister Ana Moser has put forward the ‘economic team on sports betting’ – a proposal to increase the gross gaming revenue (GGR) tax rate from 15%-to-16%.

In her proposal, Moser recommended that the Ministry of Sports should function as the central tax collector for Brazilian betting, allocating funds to various public agencies and sports organizations.

The proposal is anticipated to be examined by Congress on 5 May, with the Ministry of Sports committing to allocate 10% of taxes to social security and 2.55% to the National Public Security Fund. 

Additionally, football clubs will receive 1.63% of the taxes, while the Ministry of Sports will retain 1%, and 0.82% will be designated for youth initiatives.

Brazilian Football clubs will likely tell Congress to reject Moser’s proposal as it fails to meet its demand that the government guarantee between 4%-to-5% of betting income to be allocated for the use of image and athlete rights.

Despite no progress on a tax settlement, The Ministry of Finance has reached an agreement co-authorised by Minister of State Planning and Budget Responsibilities Esther Dweck to create a  ‘Betting and Lottery Secretariat’.

The department will serve as the organisation responsible for overseeing licensing applications of Brazilian sports betting and monitoring the volume and revenue of bets taken by licensed businesses.

The Ministry of Finance maintains its pre-market estimate that a regulated sports betting regime could see between 70-to-100 new businesses taxed.

In other developments, Congress is anticipated to evaluate counter-proposals to the legalization of sports betting presented by Evangelical representatives, consisting of 135 deputies and 12 senators. They are concerned about the possible societal consequences of sports betting and find it challenging to justify support from their local constituents.

Finance Minister Fernando Haddad remains optimistic that the government will be able to finalise the terms of a new federal sports betting framework in the coming weeks, ensuring the Treasury’s fiscal agenda stays on track.

Yet, a showdown appears on the horizon as the government is yet to appease the demands of Brazilian football clubs on betting income rights and governing body, the CBF on its desired duties with regards to sports betting.