According to a report in local daily O Globo, the government is seeking to
stave off a battle between states and the federal government as certain states seek to attract operators with lower fees and tax rates. To obtain federal authorisation, companies will have to pay R$ 30 million and a tax rate of 12
percent on gross income. In the case of Rio de Janeiro however the price is R$ 5 million and the tax burden is also lower, at five per cent of income.
services. According to the opinion of the deputies, electric cars and sports betting, fantasy games and lotteries will also be subject to the tax charged on items that harm health or the environment. Te new taxes could also be imposed on other types of gambling if Congress passes its wider land based expansion bill PL 2234/23. Members of the working group want any type of gambling, be it face-to-face or online, be taxed with the higher tax rate. Meanwhile conflict between the federal government and the
state lottery of Rio de Janeiro (Loterj) has been escalating with speculation that the issue could well end up in the Supreme Court (STF). However it looks as if Loterj could be backing down in its attempts to block operators from offering their services in the state. Te background to how state governments were permitted
to offer sports betting is complex. In September 2020, the STF ruled that the federal government’s lottery monopoly was unconstitutional, paving the way for states to develop state lotteries for each of Brazil’s 26 states and one federal district as long as they complied with federal regulations. Sports betting was categorised as “sports lotteries’ in 2018 via Law No. 13,756 which was signed by then President of Brazil, Michel Temer in 2018. It legalised sports betting on a federal level although regulations weren’t put in place over the industry until now. According to a report in local daily O Globo, the government
is seeking to stave off a battle between states and the federal government as certain states seek to attract operators with lower fees and tax rates. To obtain federal authorisation, companies will have to pay R$ 30 million and a tax rate of 12 percent on gross income. In the case of Rio de Janeiro however the price is R$ 5 million and the tax burden is also lower, at five per cent of income. Many states have begun to roll put their own lotteries and
sport betting options. In May 2023 Loterj published the requirements for companies interested in competing for the licence to run and develop fixed-odds online and land based
sports betting. Crucially Rio de Janeiro has not imposed any geographical restrictions on the sites it has granted a licence to, enabling them to operate nationwide. Loterj decided not to respond to a request from the Ministry of Finance regarding the issue of offering sports betting outside of state borders. In fact Loterj has fiercely defended its actions saying that its actions are entirely within the scope of the powers granted to it by the Supreme Court. In addition Loterj has actively sought to block unlicensed
sites from operating within state borders. In July Brazil’s National Telecommunications Agency (Anatel) sent a letter to Internet Service Providers in Rio de Janeiro ordering them to block access to sports betting and online gambling websites that didn’t have authorisation from Loterj. Te Attorney General's Office (AGU) appealed the injunction of a federal appeal court which had ordered the blocking online bookmakers. Te AGU argued that the regulation of the betting market is the competence of the federal government. Te National Association of Games and Lotteries (ANJL) has
also criticised the move and filed its own legal appeal arguing that online gambling falls under federal jurisdiction. Te blocking of online betting sites it said had created “a scenario of dangerous legal uncertainty, as federal regulation naturally supersedes the legislation of the State of Rio de Janeiro and Loterj’s licensing terms.” Te association concluded by saying that it was “important
to highlight that in 2020, the Brazilian Supreme Federal Court (STF) ruled that lottery operations are not exclusively under the Union’s jurisdiction but can also be conducted by states and the Federal District, with regulatory power solely vested in the Union. Terefore, the state must adhere to federal rules and not misinterpret them.” In August the Rio de Janeiro Federal Regional Court of the First Region suspended the blocking of operators not licensed by Loterj ruling that they could continue to operate in the state.
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