Brazil Welcomes Sports Betting
While Brazil’s sports betting and gaming overhaul laws are still under discussion as its presidential administration changes hands, some municipalities have made moves to welcome sports betting. To start, S?o Paulo has initiated a tax reduction for related services. Rio de Janeiro is looking into similar possibilities to increase its attractiveness to sports betting houses in the future.
Two Brazilian cities are making moves to become more attractive to sports betting and fantasy gaming providers. Marcos Paulo Prado/Unsplash
Tax reductions in S?o Paulo
Recently, S?o Paulo’s municipal government put a tax reduction into effect which will affect sports betting, as well as other industries. The official tax in question is called the Tax on Services of Any Nature — or ISS for short — and will apply to businesses involved in entertainment.
The entertainment business umbrella includes sportsbooks, providers of fantasy sport services and lottery games, among others. Thanks to this change, taxes on these industries will be lowered to 2%. The official law was registered in the local gazette, as usual, and is called Law 17.875/2022. It was initially approved by the executive branch in November and made into law some weeks later.
The goal of the plan is clear: S?o Paulo’s City Council aims to increase entertainment offerings in the area by giving advantages to providers. The idea is to bring more businesses in these fields to the municipality. Not only will they provide services and collect tax revenue, but new businesses will also hopefully provide much-needed roles for locals in search of work, thus boosting the economy.
Rafael Marchetti Marcondes, who heads Brazil’s Fantasy Sports Association — known as ABFS — spoke about the change positively. He said that it will help on a local level but also a national level when it comes to creating good conditions for growing such businesses.
Marcondes also reiterated that S?o Paulo’s investment in the sector could act as a trial for other cities in a sense. Across Brazil, various county and municipal governments might take into account how the project goes in this area and make their own implementations, if they see the efforts are yielding positive results.
These recent changes were made in part thanks to councilor Rodrigo Goulart, who wrote to the mayor and Treasury Secretary to encourage them. Goulart also believed strongly that such changes would help make the city a viable option for more entertainment companies and would help the treasury in turn.
Rio de Janeiro on track to improve conditions for sportsbooks
Meanwhile in Rio de Janeiro, councilors are also considering a project to reduce sports betting and fantasy gaming-related taxation. Councilor Pedro Duarte will present the idea in the new semester of the local council. Duarte’s goal is likewise to attract sports betting companies to the area.
Like in S?o Paulo, this would happen through a reduction of the local ISS tax. In a way, the original city’s decision has also affected the movements in Rio de Janeiro, as Duarte warned the tax reduction there could motivate companies to abandon the area if they do not offer similar incentives.
Duarte plans to create a taskforce to work on this in the first half of 2023, though a longer-term timeline for its implementation is unclear as of yet. Duarte also explained that Brazil’s sports betting record is strong and the industry continues to grow, which is why the area should keep up with developments and remain competitive in the field.
He mentioned the importance of these changes not only for the industry, but for the strength of Rio de Janeiro’s reputation as a tourism capital within Brazil. Meanwhile, the federal government still has not made any moves on the full regulation of sports betting.
