Senate approves basic text of bill to tax sports betting and virtual gambling.

The proposal, which was amended by the senators, will return to the Chamber of Deputies for another round of voting. The Senate plenary still needs to analyze suggestions for changes to the text (highlights) before concluding.

According to the text, betting companies will have to pay 12% tax on their revenue. Meanwhile, bettors will only be charged once a year and only if the value of their winnings exceeds R$ 2.112 — the income tax exemption threshold for individuals.

For those who gamble, the tax, which will be 15%, will only apply to the winnings obtained, after deducting the amount wagered.

In addition to online betting and casinos, these fees will also apply to fantasy games, those in which the bettor manages sports teams virtually by selecting real athletes.

The measure was included to equalize the taxation of different types of virtual games.

The approved rates are lower than those initially suggested by the economic team of Finance Minister Fernando Haddad. Previously, the tax would have been 18% for sports betting sites and up to 30% on prizes won by individuals.

The change is expected to impact the Treasury's initial revenue projection for the proposal (R$ 700 million next year).

The rapporteur, Angelo Coronel (PSD-BA), argues that the rule will still bring in a large amount of revenue since today betting, despite being legal in the country, is not being taxed by the government.

“In this project, we foresee the collection of 12% on net revenues from prize payments, which will fund the areas of health, public safety, education, social security, tourism, and sports. These resources could bring an estimated R$ 10 billion annually to the country, in addition to the nearly R$ 4 billion already projected through more than 130 authorizations requested from the Ministry of Finance,” the senator states in the report.

The opposition, mainly the evangelical bloc, is strongly opposed to the measure because it authorizes the taxation of gambling.

The proposal opens a loophole for this type of game because it generically refers to "online games" and "virtual online game events."

The draft describes the terms as a bet whose "outcome is determined by the outcome of a random future event" and whose "outcome is unknown at the time the bet is placed."

In response to opposition members, the rapporteur said it was a "fallacy," a "big lie" that physical slot machines could be installed in establishments such as bakeries and supermarkets.