## Brazils Sports Wagering Levy Sparks Worry – iGB
Brazil’s suggested 15% levy on overall gambling earnings from sports wagering has ignited concerns from various parties involved. One notable figure believes that the actual tax rate could reach 26.25% after extra payments.
**Home > Law & Compliance > Brazil’s Sports Wagering Levy Sparks Worry**
Brazil’s sports wagering tax rate is causing anxiety. On April 12th, the Brazilian Ministry of Finance held a public gathering in Brasilia to announce a 15% tax on overall gambling earnings from sports wagering.
The public meeting was held by the Ministry of Finance with industry participants to discuss the content of the proposed Provisional Measure (PM), which will outline the framework for Brazil’s regulatory system.
According to Neil Montgomery, founder and managing partner of the Brazilian law firm Montgomery & Associados, the PM is nearing completion. It is likely to be released by President Lula upon his return from his visit to China.
Montgomery stated that Brazil’s sports wagering tax rate is based on the British model. However, it remains unclear whether the proposed 15% is the total amount operators will need to pay, as operators claim that the rate will be added on top of existing federal social contributions and municipal service taxes, bringing the total tax rate to 26.25%.
Should the confirmation be finalized, Brazil’s approach will deviate significantly from the UK’s 15% framework,” Montgomery stated.
“This explains the industry’s outrage over the declaration, prompting them to advocate for modifications in the impending legislation.”
In Brazil, gambling industry representatives are actively engaging in the legislative process to shape the upcoming gambling regulations. Representatives from prominent Brazilian football clubs also took part in the gathering, releasing a joint statement urging the government to include them in the deliberations.
Other entities present at the meeting included several recently established trade organizations representing Brazilian sports betting firms and international operators.
“All these interested parties still have the potential to sway the Ministry of Finance and other government entities in shaping the temporary measure that President Lula will issue,” Montgomery remarked.
“It is also crucial to acknowledge that even after its issuance, the temporary measure – which takes effect immediately upon publication in the Official Gazette and holds the same legal standing as federal ordinary law – remains subject to adjustments during congressional review.”
According to Montgomery, Congress will have a 120-day window to convert the temporary measure into federal ordinary law. Should it fail to do so, the temporary measure will be revoked.
Scratch-off lottery tickets will be reintroduced.
Whispers are spreading that the head of the government will discuss fixed-odds sports wagering, or that the PM will make a separate statement about restarting LOTEX, the scratch-and-win lottery the government tried to sell to private companies in 2019.
“The lottery failed in its second year because the winning group, composed of IGT and Scientific Games, declined to sign the agreement,” said Montgomery.
This was primarily due to a 2020 Supreme Court decision that ended the federal union’s exclusive control over lottery operations in Brazil.
“There are whispers that the federal government intends to have the federal savings bank CAIXA, which currently runs the federal lottery, also manage LOTEX, even if only for a short time,” added Montgomery.
Sign up for the iGaming newsletter.