On Wednesday, June 11, the tax on the revenue of betting companies increased from 12% to 18%, a rate that will take effect starting in October. This initiative was part of a provisional measure, an alternative to the Planalto Palace’s retreat on raising the Tax on Financial Transactions (IOF).
The minister once again defended the provisional measure compensating for the IOF exemption, which was sent to Congress. "We are the ones taxing 'Bets' and billionaires," Haddad posted on social media. "We are the ones exempting the worker from income tax," aligning with the government’s communication strategy to counter criticism of the package.
The entities also requested meetings with the Speaker of the House and three ministries: the Civil House, Tourism, and Sports. The Ministry of Sports stated that it does not have the authority to discuss 'Bets' taxation and that it only acts in combating the manipulation of results in sporting events. The Civil House, Tourism, and the Chamber did not respond.
“We respectfully address Your Excellency to urgently request a meeting to present our deep concerns about reports indicating the possibility of a new tax increase on the betting sector,” the document signed by six sector entities on the 2nd stated.
These entities are: Brazilian Association of Games and Lotteries (AbraJogo), Association of Bets and Fantasy Sports (ABFS), International Gaming Association (AIGaming), National Association of Games and Lotteries (ANJL), Brazilian Institute of Responsible Gaming (IBJR), and the Fair Play Institute (IJL).
According to the letter sent earlier this month, the tax increase “could have severely adverse consequences, risking strangling legal operations and, paradoxically, strengthening the illegal market operating outside legislation and government oversight.”
'Bets' see dialogue with Haddad becoming more difficult
Representatives of sports betting companies told the Estadão Column, under anonymity, that dialogue with Fernando Haddad has become more difficult.
A sign of this distancing was a statement made by the minister on Thursday the 12th, the day after the tax increase on bets, about reconsidering the companies’ operation in the country. Haddad said:
“We did not have a sense of the sector ('Bets'), its size. Today, this sector, between the amount received from bets and what is paid in prizes, is making a gross profit of around R$40 billion (US$7.2bn) annualized. They do not generate jobs. Personally, I don’t like gambling. It is something that should even be reconsidered by the National Congress. Of these R$40 billion (US$7.2bn), they must generate something with less than R$10 billion (US$1.8bn) in taxes. In other words, a better rate than a normal company,” he pondered.
'Bets' have operated legally for six months
The 'Bets' law was enacted in Brazil in December 2023, after approval by the National Congress. In 2024, the Ministry of Finance regulated the sector and detailed the rules for its operation.
To operate in the country for the next five years, each company had to pay a license fee of R$30 million (US$5.4m), in addition to meeting a series of legal requirements such as fighting fraud, money laundering, and abusive advertising.
Source: GMB / Estadão
