New Law Regulates Online Betting and Establishes Taxation for "Bets"

The new legislation regulating the sports betting market came into force following the sanction of President Luiz Inácio Lula da Silva. Law 14.790/23 establishes taxation for both companies and bettors, defines rules for the provision of the service, determines the sharing of revenue and establishes restrictions, such as a ban on children under 18 and people who can influence the outcome of games, among other points.

The law covers various types of betting, including fixed oddsbets, known as "bets", in which the bettor knows in advance what the rate of return will be at the time of the bet, usually related to sporting events. This scope includes virtual bets, physical bets, real sporting events, online games and virtual events of online games, such as casinos.

Bettors will be subject to a 15% tax on net winnings through Personal Income Tax (IRPF), while companies will be taxed at 12% on turnover. Companies will be able to withhold 88% of gross sales to fund their activities, with 2% going to the Social Security Contribution and the remaining 10% being divided between areas such as education, health, tourism, public safety and sport.

Although most of the rules are already in force, the part relating to the taxation of bets will come into force on April 1, 2024. Other provisions are still subject to regulation by the government.

Sources:

Agência Câmara de Notícias. https://www.camara.leg.br/noticias/1030406-entra-em-vigor-lei-que-tributa-apostas-on-line-e-define-regras-para-a-exploracao-do-servico/#:~:text=A%20Lei%2014.790%2F23%20tributa,retorno%20no%20momento%20da%20aposta.

G1, Globo. https://g1.globo.com/politica/noticia/2023/12/31/entenda-o-que-muda-com-novas-regras-para-apostas-esportivas-online.ghtml