On July 25, 2023, Provisional Measure No. 1,182 was published, presenting updated regulation for the operation of fixed-odds sports betting, also known as ‘bets’.
This MP amends Federal Law No. 13,756/2018 and establishes that ‘bets’ companies will be taxed at 18% on the “Gross Gaming Revenue” (GGR) – the gross revenue obtained from all bets made, subtracting the prizes paid to players. This is a significant move by the government to increase tax revenue next year and achieve the goal of a primary result equal to zero.
It is also planned to divide the 18% taxation on the GGR of companies as follows: 10% for social security; 3% to the Ministry of Sports; 2.55% to the National Public Security Fund; 1.63% for clubs and athletes who have their names and symbols linked to the bets; and 0.82% for basic education.
Additionally, the new provisional measure brings a set of rules for the request of authorization to exploit the activity by national or foreign legal entities, as long as they are established in the national territory. It details obligations and restrictions in the exploitation of images and names of athletes and sports organizations, as well as advertising and publicity restrictions for unauthorized companies. There are also restrictions on the involvement of shareholders or controlling partners of lottery operator companies in professional sports organizations.
It is important to note that the MP provides for a daily fine of R$ 10,000, which can be increased up to 20 times, in case of refusal, omission, falsity, or unjustified delay in providing information or documents by the regulated agents.
Finally, there will be income tax on the award and loss of the right to receive prizes or request refunds, if they are not claimed within 90 days. The value of unclaimed prizes will be reverted to FIES.
The new regulation announced by the Public Ministry represents a significant milestone in the modernization and regulation of the sports betting market in Brazil. Aligning with international standards, the measure seeks not only to protect bettors but also to establish a safe and transparent business environment for operating companies. In addition to greater security in transactions and greater transparency in game rules, the new regulation is expected to encourage the entry of new operators into the market, thus increasing competitiveness and, potentially, the quality of services offered.