Introduction
The regulation of fixed-odds sports betting in Brazil has gained prominence with the publication of specific rules by the Secretariat of Prizes and Betting of the Ministry of Finance (MF). A central point of this regulation is the definition and accounting of Gross Gaming Revenue (GGR), which serves as the basis for calculating social contributions and taxes levied on the activity.
Recently, Technical Note SPA MF No. 299/25 provided clarifications on how rewards are treated and whether they are included in the GGR. This article analyzes the legal and accounting aspects involved, highlighting the correct interpretations and shortcomings of the current understanding of the regulations.
1. The concept of GGR and its relevance
Gross Gaming Revenue (GGR) is defined by Law 13.756/18 as “the total obtained through the collection of bets or the sale of lottery tickets, whether physical or digital” (Art. 14). In other words, GGR represents the gross revenue from bets, minus the prizes paid to bettors and withholding income tax. This metric is fundamental for:
* Tax Calculation: PIS, Cofins, and ISS are levied on GGR.
* Social Allocations: A portion of the GGR is directed to social funds and programs, as established by Law 14.790/23.
2. Rewards in fixed-odds betting
Rewards are tools used by operators to retain customers. They can be classified into two types:
1. Financial Rewards:
* Withdrawable: Can be converted into cash and transferred to the bettor's transactional account.
* Non-withdrawable: Can only be used for new bets and cannot be cashed out.
2. Non-financial rewards:
* Include benefits such as free bets, free spins, or more favorable betting conditions.
3. Accounting treatment of rewards
Technical Note SPA MF No. 299/25 sets guidelines for accounting rewards in the GGR. However, there are controversies regarding the interpretation of these rules. Below is a breakdown of the treatment of each type of reward.
3.1. Non-financial rewards
* Definition: These are benefits that do not generate entries in the bettor's graphic account (wallet). Examples include free bets, free spins, and enhanced odds.
* Accounting treatment:
- Not included in GGR: As they do not have pecuniary value, these rewards do not represent revenue for the operator.
- Rationale of the Technical Note and Counterpoints: The Technical Note assumes that since there is no transfer of monetary value or movement in the graphic account, there is no revenue for the operator.
Although the conclusion is correct, the premise should instead be that non-financial rewards are an expense for the platform, as incentives that result in winning bets cause losses to the operator.
The obligation to pay a prize to the bettor creates a financial outflow for the platform—an expense. At best, if the incentive results in a losing bet, the outcome is cash-neutral for the operator, meaning there is neither a gain nor a loss.
* Practical example: A bettor receives 10 free spins on a slot machine. As there is no cash conversion, the value is not included in the GGR.
3.2. Financial rewards
Financial rewards are of a pecuniary nature and are recorded in the bettor's graphic account. They are divided into two subtypes:
3.2.1. Withdrawable financial rewards
* Definition: Benefits that can be converted into cash and transferred to the bettor's transactional account.
* Accounting treatment:
- Included in GGR if used for bets: If the bettor uses the benefit to place a bet, the amount is recorded as revenue for the operator.
- Rationale of the Technical Note and Counterpoints: The Technical Note incorrectly assumes that if the reward results in a bet, it must be considered operator revenue.
However, Articles 14 and 30 of Law 13.756/18 explicitly state that GGR is “the product of the total collection obtained through the receipt of bets.” Thus, for revenue to exist, two elements must be present: (i) collection, i.e., cash inflow to the platform, and (ii) the offering of bets.
In the case of withdrawable rewards, a bet occurs, but no collection is generated. The operator does not earn revenue from the transaction. In fact, it incurs an expense if the bet wins, or has a neutral cash effect if it loses.
* Practical Example: A bettor receives R$100 as a cashback bonus, withdrawable after certain conditions. If used for betting, the Technical Note includes the amount in the GGR, which contradicts the legal concept of collection.
3.2.2. Non-withdrawable financial rewards
* Definition: Benefits that can only be used for new bets and cannot be cashed out. Examples include rollover bonuses and cashback.
* Accounting treatment:
- Included in GGR regardless of use: Even if the bettor does not use the bonus, the amount is recorded as operator revenue.
- Rationale of the Technical Note and Counterpoints: The inclusion is seen as a “business risk” assumed by the operator, aligned with responsible gaming policies.
The Technical Note, however, ignores that Articles 14 and 30 of Law 13.756/18 require two elements for GGR:
1. Collection (revenue generation for the operator).
2. Execution of bets.
In the case of unused non-withdrawable rewards, neither condition is met. The operator incurs an expense if the bet wins or experiences a neutral outcome if the bet loses. No revenue is generated in any scenario.
If the bet is never placed, and there's no revenue, there's also no fulfillment of the betting condition, required by law for inclusion in GGR.
* Practical Example: An inactive bettor receives a R$50 bonus to resume betting but does not use it. The Technical Note includes the amount in the GGR, even though there’s no collection or actual bet. No revenue enters the operator’s cash flow.
4. Critical analysis
Technical Note SPA MF No. 299/25 is correct in stating that the characterization of operator revenue (GGR) must follow Articles 14 and 30 of Law 13.756/18, which require revenue derived from the execution of bets. However, it overlooks that both conditions—collection and betting—must be met.
If either of these conditions is not met, there is no revenue. According to the law, revenue requires both a cash inflow and the placing of a bet.
Regardless of the type of reward (financial or non-financial), it represents a resource (pecuniary or not) that the operator provides to the bettor.
If the reward leads to a winning bet, it causes a cash outflow— an expense for the platform, not revenue. Revenue accrues to the bettor, not the operator.
At best, the reward has a neutral effect if used in a losing bet or not used at all. No prize is paid, no cash is spent, and no gain is generated that could be considered revenue.
Arguments made in the Technical Note—such as non-use of the bonus being a business risk or part of responsible gaming—are not contemplated in the legal definition of GGR under Articles 14 and 30 of Law 13.756/18.
The legislator did not include business risk or responsible gaming practices as criteria for defining operator revenue. If the Legislative Branch did not include them, the Executive Branch, as the interpreter of the law, cannot expand, restrict, or deviate from the legal framework.
The improper inclusion of reward values in GGR distorts the tax and social contribution base, harming operators and generating legal uncertainty. This violates Article 150, I of the Federal Constitution (which prohibits taxation without legal authorization), Article 113 of the National Tax Code (which prohibits taxation without a taxable event), and Article 108, §1 of the same Code (which prohibits using analogy to impose taxes not provided by law). Broadly speaking, the Technical Note violates the principle of legality.
5. Conclusion
The regulation of GGR and the treatment of rewards in fixed-odds betting are complex issues that require careful interpretation of the law. Technical Note SPA MF No. 299 provides clear guidelines but fails to recognize the nature of rewards as expenses. To ensure legal certainty, future regulations must correct these inconsistencies and align strictly with the legal requirements set forth in Law 13.756/18.
Rafael Marchetti Marcondes
Professor of Sports, Entertainment, and Tax Law. PhD and Master's in Tax Law from PUC/SP. MBA in Sports Management from ISDE Barcelona/Spain. MBA in Sports Betting Management from Ohio University/USA. Chief Legal Officer at Rei do Pitaco. President of the Brazilian Fantasy Sports Association (ABFS). Legal Director of the Brazilian Institute for Responsible Gaming (IBJR). Director of Government Relations at the Brazilian Association for the Defense of Sports Integrity (ABRADIE).
