Arthur Lira was the keynote speaker at an event in São Paulo organized by the Brazilian Association of Event Promoters (Abrape).
In an interview with journalists during the event, federal deputy Arthur Lira was unequivocal: “The so-called ‘Bets’ are inevitable. It’s no use for the government to say ‘I’m going to end bookmakers.’ People will gamble on irregular, illegal, foreign platforms. So, I think the first step is for the government to go after the illegal operators that don’t pay taxes and launder money through fintechs.”
According to him, the government needs to crack down on illegal betting companies before increasing taxes on those operating within the regulatory framework, in order to protect the ones that comply with the law. “If half the sector pays taxes and the other half is illegal, is it fair to raise taxes on the half that works correctly? It’s very easy in a pre-election moment to say what everyone wants to hear,” said Arthur Lira.
The government attempted to raise the betting tax through Provisional Measure 1,303, which was rejected by the National Congress. The measure would have increased the rate from 12% to 18%, and shortly after its rejection, new bills were introduced, still under consideration, proposing rates of 24% and even 25% on GGR.
Industry associations have been trying to demonstrate the mistake of overtaxing an activity that began operating less than a year ago. Their warning is that bettors may migrate to the illegal market, since authorized operators will need to reduce their odds to survive in the competitive regulated environment.
They also point to the risk of future legal disputes, as business plans were defined based on the current law, which sets a 12% direct tax on GGR, plus the other taxes applied to any economic activity, resulting in a total burden of more than 26%, one of the highest in the world.
Another risk is the withdrawal of companies that have applied for a license but are still under review by the Ministry of Finance’s Prizes and Betting Secretariat (SPA). Instead of operating in the regulated market, they may move their operations abroad, paying no taxes and offering no security to bettors.
Source: GMB
