Companies will be taxed at 18%; MP must be analyzed by Congress within 120 days so as not to lose validity
The government published an MP (provisional measure) that regulates sports betting. The rules are in force, but must be analyzed within 120 days by the National Congress or they will expire. The document (full – 184 KB) is in this Tuesday’s (25.July.2023) edition of Official Diary of the Union.
In May, the Ministry of Finance decided to tax electronic sports betting companies on the so-called GGR (Gross Gaming Revenue), gross gaming revenue. The rate published at the time was 16%, with 1% for the Ministry of Sports. But, according to the MP, the percentage allocated to the body increased to 3%, bringing the total to 18%.
The fee is broken down as follows:
- 10% social security contribution;
- 0.82% for basic education;
- 2.55% to the National Public Security Fund;
- 1.63% to clubs and athletes whose names and symbols are linked to bets;
- 3% to the Ministry of Sports.
The MP modifies the 2018 law that regulates the exploitation of fixed-quota lotteries by the government. The legislation determined that this was a public service exclusive to the Union, but the term “exclusive” was taken from the text.
Now, “the fixed odds lottery will be granted, permitted or authorized, on a onerous basis, by the Ministry of Finance” and will be “operated exclusively in a competitive environment, with no limit on the number of grants, with the possibility of commercialization in any commercial distribution channels, physical and virtual.”.
Partners and shareholders of betting companies, called “bets”, may not act as managers or participate in sports organizations. Companies must inform the Ministry of Finance of any suspicion of manipulation of results.
The “bets” must also promote awareness actions about gambling addiction and cannot “acquire, license or finance the acquisition of rights to sports events held in the country for broadcasting, diffusion, transmission, retransmission, reproduction, distribution, availability or any form of exhibition of their sounds and images, by any means or process”.
Communication, publicity and marketing “will observe the regulations of the Ministry of Finance, encouraging self-regulation”. O conar (National Council for Advertising Self-Regulation) “may establish additional restrictions and guidelines to the regulations of the Ministry of Finance and issue specific recommendations”.
Fines for violating the rules vary from 0.1% to 20% on the company’s collection per infraction – observing the limit of R$ 2 billion. The partial or total suspension of the exercise of activities and revocation of the operating license may also be determined.
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