According to one of Brazil’s leading gambling specialists, the new tax rate on sports betting will most likely be based on gross gaming revenue (GGR) rather than turnover.
“COVID-19 has delayed the regulatory process. It shows how desperately Brazil needs to legalize all forms of games of chance,” said Neil Montgomery, Montgomery & Associados manager. This also implies implementing a tax structure based on GDP rather than turnover that is sufficient to attract many operators to Brazil as a land of opportunity.”
In most European jurisdictions, operators accept the GGR taxation model as the most beneficial approach to taxation for online gambling.
The International Betting Integrity Association (IBIA) responded to the Brazilian sports betting consultation in August 2019. It proposed taxation based on gross gaming revenue (GGR). Brazilian Supreme Court also pointed to GGR as the tax calculation method for horse racing bets and poker.
The government, according to Mr. Montgomery, is still in favor of the concession model.
“In terms of the number of fixed-odds sports betting licenses being made available by the federal government, initial rumors suggested that there could be as many as 30 licenses available. But that number gradually increased. Speculation suggested that the number could be between 50 and 100.
Mr. Montgomery predicts that the process might delay. Waldir Eustáquio Marques, the Ministry of Economy’s Undersecretary of Prizes, stated that the regulation would take place by July 2021. Mr. Montgomery, on the other hand, believes the government will be unable to meet this deadline.
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