Zona de Azar Brasil – CEO of Betnacional States That the Only Tax Paid by the Company Today is the IOF
Brazil.- December 5, 2024 www.zonadeazar.com To discuss the impact of the legalization of the online gambling sector on tax revenue, the CPI of Bets heard representatives from the sector this Tuesday (3). The CEO of Betnacional, João Studart, reported that the company currently only pays the Financial Operations Tax (IOF) on the inflows and outflows of funds between Brazil and Curacao, where the company is based.
He highlighted that starting in 2025, the company will move to Brazil and will begin paying other taxes such as PIS, Cofins, ISS, Corporate Income Tax, and a fee for the betting sector.
For the rapporteur of the CPI of Bets, Senator Soraya Thronicke (Podemos-MS), tax collection should consider the entire period of operation of the companies, even before the regulation by the Ministry of Finance, which will begin in 2025. Betnacional started operations in 2021.
— One [desired] condition is that taxes be paid retroactively, because it is not possible for anyone to engage in any activity without paying taxes. I want to see this [retroactive collection] from the Ministry of Finance — declared Soraya.
João Studart stated that Betnacional has its headquarters in Curacao to take advantage of the commercial license from “game aggregators,” which allow their sites to offer betting, something that he claims is common in the betting market. The CEO also mentioned that the company has an international contract with a third-party company employing around 250 people, most of whom work in Brazil. For him, the fact that Curacao is a tax haven “is another issue,” which does not imply illegality in the company’s operations.
Tax Burden Studart also stated that his company has always operated legally, and he expects a 40% tax burden on operations starting in 2025.
— We collect the “exchange rate” and IOF. That’s all we can collect. The legislation didn’t allow me to have a CNAE [National Classification of Economic Activities, from the Federal Revenue Service], to have a company to collect [other] taxes. We were waiting for the regulation. We were operating while waiting, and the [regulation] was delayed, until it came… All companies are in the same situation as Betnacional. Any measure or law that the government puts, we will comply with 100%. Starting January 1, 2025, everything will be transferred to Brazil, and operations abroad will cease — he said.
Law 13.756, from 2018, began allowing state authorization for the operation of online betting, but there is still no definitive procedure for the grants. The law required the Executive Branch to send a regulatory proposal by 2022, but the regulation only began to exist after the publication of Law 14.790, on December 29, 2023. Since then, the Ministry of Finance has developed several rules to implement the new law.
For now, there is a “transitional period” in which companies interested in operating starting in 2025, with the new phase of regulation, must pay R$ 30 million, as happened with Betnacional and 100 other companies. This way, they can continue operating until December.
No Revenue The president of the State Lottery of Rio de Janeiro (Loterj, which is a state agency), Hazenclever Lopes Cançado, criticized the “transitional period” allowed by the Ministry of Finance. For him, the Ministry created a “tacit list” where 101 betting companies can continue operating until 2025, even if not all of them have paid the R$ 30 million mentioned earlier and without verifying their operating conditions, in violation of the legislation. According to him, if the regulation had been proposed by the Executive Branch within the deadline, federal revenue would have avoided the current discussions about cutting expenses.
— The legislators of this House did not authorize this grace period for the betting companies to operate in Brazil. Congress did not authorize operators to profit without paying any grants or taxes… We have 16 states in the country that don’t have a budget that can generate the revenue that a betting company makes [annually]… You [addressing the rapporteur of the CPI, Soraya Thronicke] can imagine how powerful a sector that earns more than R$ 300 billion a year today is? — he questioned.
Hazenclever Cançado mentioned that there have been relevant cases reported in the media of betting companies accepted in this list that are registered under “strawmen.”
Regulation Senators Izalci Lucas (PL-DF) and Marcos Rogério (PL-RO) criticized the loss of revenue during the period. Marcos Rogério also questioned the legality of Betnacional’s operation, which operates through a company based abroad, something that, according to him, should not be possible until the regulation is fully implemented.
— Either the company is committing the crime of tax evasion, or the government is committing the “crime” of revenue loss — said Marcos Rogério.
But for Senator Angelo Coronel (PSD-BA), the absence of regulation does not prevent the operation of betting. Responsibility, for him, should be held accountable for public officials who delayed the implementation of the rules.
— If it hasn’t been regulated yet, for any mistakes that have happened over time, if there is no law, how does the person know if it’s legal or illegal? We need to be very cautious about this. If by 2025 we have the law regulated, and if the players keep making mistakes, let them be punished. But we can’t crucify [anyone] if there’s still no regulated law here in Brazil.
Children and Adolescents In response to a question from Senator Damares Alves (Republicanos-DF), João Studart stated that Betnacional does not allow bets by minors, requiring a CPF for this. Moreover, according to him, the rules for 2025 will require facial recognition.
Soraya Thronicke accused the CEO of One Internet Group, Fernando Oliveira Lima, who testified before the CPI last Tuesday, of lying to the committee. According to her, Fernando claimed that his site already had facial recognition technology, but the senator’s team did not find this feature in a test conducted.
CPI of the Bets The parliamentary investigative committee seeks to clarify the impact of digital betting on the financial health of Brazilians and investigate possible illegal activities. The committee will have a total of 130 days to complete its work, with a spending limit of R$ 110,000.
The games created by the sector and pending regulation are known as “fixed-odds bets,” referring to online sports betting (the so-called “bets”) and online games resembling casinos (such as Fortune Tiger, popularly known as the Tiger Game). “Fixed odds” allows the bettor to know in advance how much more they will receive on the amount bet if they win. Source: Agência Senado
Editó: @_fonta www.zonadeazar.com
