In 2018, Brazil passed legislation that allowed for online sports betting; however, the law did not include a regulatory framework, preventing the government from collecting taxes on the activity. Recently, the country’s Ministry of Finance proposed a new taxation plan, which has reportedly gained enough support among legislators and President Inacio Lula da Silva to be put into effect.
Operators will have to pay a licensing fee of 30 million Brazilian Reais (approximately 6.01 million US dollars) and a 15% tax on their gross gaming revenue. Bettors will have to pay 30% of their winnings to the government, although there will be exemption for prizes that are within a certain amount.
These fees will make the effective tax rate for operators over 20%, although it is still lower than the 51% tax rate in New York. Additionally, companies must pay other taxes such as the Corporate Income Tax and the Contribution for the Financing of Social Security. The money generated from the industry will be reinvested in the Brazilian economy.