Brazil's Sports Betting Tax Breakthrough: 12% Rate Approved as Bill Heads to Crucial Senate Vote

In a significant development for the sports betting landscape in Brazil, the country's Economic Affairs Commission (CAE) has confirmed a reduced 12% tax rate following the approval of Bill 3,626/23 on November 22. This approval paves the way for the bill to progress to the Senate Plenary, where a crucial vote is scheduled for November 28. The upcoming decision holds the potential to grant approval for both sports betting and igaming in Brazil.

The initial approval of Bill 3,626/23 by the CAE represents a significant step, allowing the legislation to move forward in the legislative process. If the Senate Plenary endorses the bill, it will then undergo further scrutiny in the Chamber of Deputies, where it was originally approved in September. However, it's worth noting that the bill faced opposition from senators such as Eduardo Girão and Carlos Portinho, who expressed concerns about the inclusion of igaming in the legislation.

Efforts to exclude igaming from the bill were unsuccessful during the recent session, despite previous attempts to remove online casino activities that were unexpectedly added in September. The CAE had initially scheduled the vote for the previous day but opted to postpone it, with Senator Girão highlighting the need for careful consideration due to the serious implications of the legislation, particularly for less privileged individuals.

Looking ahead, if the Senate Plenary approves Bill 3,626/23, it will return to the Chamber of Deputies for further review. A positive vote there would set the stage for the bill to reach President Lula da Silva for final approval, potentially opening the door for the launch of the sports betting market in Brazil.

The journey of sports betting legalization in Brazil has been complex, marked by various legislative measures and amendments. In May, the government introduced a provisional measure for sports betting, which was later signed into law in July. This move incorporated the 2018 sports betting measures into law, although it faced criticism from the gaming industry due to high tax rates on gross gaming revenue (GGR) and marketing restrictions.

Bill 3,626/2023 emerged later in the year, amending the previous provisional measure and notably including online casino activities in its scope. Initially featuring an 18% tax rate, the bill has undergone changes, culminating in the recent CAE approval of a reduced 12% tax rate. Brazil's Ministry of Finance also outlined general conditions for sports betting in October, emphasizing the requirement for operators to have a subsidiary in the country to obtain a sports betting license. The upcoming Senate Plenary vote on November 28 holds the key to the future of the sports betting and igaming landscape in Brazil.

By fLEXI tEAM