BRASILIA (Reuters) – Brazil’s finance ministry said on Thursday that an upcoming executive order would impose taxes on sports-betting companies and winners’ gains, potentially opening room for further measures to prevent manipulation.
Following a high-profile scandal of alleged match-fixing and illegal gambling with the involvement of professional soccer players in the country, the ministry said in a statement that the measure, which has yet to be formally proposed to Congress, would “guarantee more confidence and security to bettors, thanks to the transparency of the rules and supervision.”
Within the government’s internal approval process to approve the regulation “the ministries will have the possibility of editing ordinances to create mechanisms to prevent and curb cases of result manipulation,” it added.
Regulation of the sector was already expected, with Finance Minister Fernando Haddad even estimating the measure to generate more than 12 billion reais ($2.4 billion) for public coffers, helping the government’s tax revenue efforts to balance public accounts.
According to the ministry, companies will be taxed at 16% on their gross gaming revenue (GGR), while players will pay 30% of income tax over their gains from bets, respecting an exemption for winnings of up to 2,112 reais ($422).
To oversee the industry in Brazil, the measure also creates a secretariat within the finance ministry’s structure to approve the operations. Only eligible companies will be permitted to accept bets and advertise in the country, said the ministry.
Online sports betting firms such as bet365, Betano, and Betfair are expanding their reach in Brazil, capitalizing on the country’s growing market and entering into significant sponsorship agreements with major soccer clubs.
($1 = 5.0033 reais)
(Reporting by Marcela Ayres; Editing by Marguerita Choy)