A bill could alter the tax rates for both operators and players
Brazil is considering new legislation that could impose a “sin tax” on sports betting, online gambling, and fantasy sports, treating them similarly to goods like alcohol and cigarettes. This proposal is part of a broader federal tax reform effort, as outlined in a report by Senator Eduardo Braga. The aim is to regulate industries deemed to have potential societal harm or negative externalities, particularly given their rapid growth in the country.
Under a recently approved tax framework, operators in the gambling sector already face a 12% gross gaming revenue tax, while players are subject to a 15% income tax on winnings over BRL 2,824 (US$530). Despite these measures, a proposed constitutional amendment seeks to expand taxation specifically on these activities through selective taxes. The Brazilian Senate is set to deliberate on this matter, though any final rates or structures would require further legislative actions.
The debate over these taxes has sparked criticism from industry stakeholders. The National Association of Gaming and Lotteries (ANJL) has expressed concerns that excessive taxation could drive players to unregulated markets, undermining efforts to maintain federal oversight. They argue that overburdening the market might hinder effective regulation and compromise consumer protections.
Fantasy sports, a niche but growing segment, is particularly at risk under the proposed tax plan. Industry advocates, including representatives from the Brazilian Fantasy Sport Association, have warned that additional taxes could stifle innovation and limit growth. They highlight the sector’s minimal environmental impact and argue that taxing it as a “harmful activity” lacks justification.
The proposed measures have raised questions about balancing economic growth, consumer protection, and tax revenue generation. Advocates for the industry stress the need for policies that encourage innovation and sustainability while maintaining effective regulation. How Brazil navigates this fine line will shape the future of its gambling and gaming markets.
Editor at the Big Blind, is a rising star in gambling journalism with a decade of experience, focusing on clear and accessible communication for a diverse audience.
