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Analysis of regulation, tax reductions and job opportunities in a growing market

While the Ministry of Finance is preparing temporary measures for the betting market, Rio de Janeiro and S?o Paulo are collaborating to attract players. Back in December 2022, S?o Paulo took the lead by approving a reduction in the ISS (Service Tax of Any Nature) from 5% to 2% for entertainment events. This discount applies to lotteries, sportsbooks, bingo, and fantasy sports. Pedro Duarte, an advisor in Rio de Janeiro and a key player in promoting Brazil’s betting sector, said that the mayor’s office has already held meetings with industry stakeholders and government officials to explore opportunities to improve competitiveness.

Commenting on the current tax of 5%, Pedro Duarte said: “One of the largest tourist destinations in the world cannot continue to lose jobs in other Brazilian capitals. The reduction of ISS for a sector that is in growing demand in Brazil and around the world, which works directly with technology, innovation and sport, is an important step for Rio de Janeiro to become competitive, attract new investment and, most importantly, create new employment opportunities.”

The possible approval of Bill No 1822/2023 will be in line with the level of taxation of S?o Paulo

Rio is now following suit and is expected to approve the same cut in the coming weeks. Minister Fernando Haddad predicts that the regulation of online sports betting will result in a total revenue collection of between R$2 billion and R$6 billion. Rio de Janeiro could soon reach S?o Paulo’s tax level if the City Council approves PL No 1822/2023.

One of the priority areas is the specialization of the workforce. The companies noted the existing experience in this area, and the mayor’s office is studying models for further training of specialists. This move will be a significant difference in the market. In addition, Rio de Janeiro is associated with the creative economy, entertainment and sports. It’s a natural calling for the city, and City Hall is working hard to showcase Rio’s strengths in these areas.

Duarte noted: “We are determined to demonstrate that Rio is ahead of S?o Paulo in these areas.”

Online sports betting regulation is projected to lead to significant revenue growth in Brazil

Competition to attract bookmakers will continue by educating professionals and showcasing additional benefits in Rio de Janeiro through job creation.

Speaking about this, Pedro Duarte stated: “From an economic point of view, there are several advantages for the city. The first is the collection of the entire operation in Brazil. Under federal law, the company will collect taxes (ISS) for all activities in Brazil at its headquarters. The second major benefit is job creation. Businesses need marketing, technology, customer service. Naturally, a significant portion of these jobs are created in the place where the company establishes its headquarters. And the third point is the development of this sports betting ecosystem, which means, for example, more sponsored sporting events in the city.”

Growth of the sports betting market in Brazil

According to Magnho Jos��, president of the Instituto Brasileiro Jogo Legal (IJL), Brazil is a nation that has a strong passion for football, and with the growing popularity of sports betting, many people are now not only cheering but also betting on their favorite teams. It is estimated that around 25 million Brazilians participate in betting on a weekly basis.

Currently, Cuiaba is the only team in Brazil’s Serie A that is not sponsored by betting companies. However, bookmakers can be seen in various forms of advertising, such as TV commercials, online portals, team jerseys, lawn signs, and social media platforms.

Magnho Jos�� also stated that the sports betting market has already reached a turnover of about R$120 billion in gross value, of which about R$12 billion has been allocated to media spending and ensuring the profitability of these operations.

The sports betting market in Brazil is booming, and the potential for growth and development is significant. As the market continues to expand, it is clear that both Rio de Janeiro and S?o Paulo are determined to come out on top, showcasing their strengths and unique advantages to attract both businesses and investors. Overall, the future of sports betting in Brazil looks bright, and it will be interesting to see how the market evolves in the coming years.

The biggest gaming event arrives in Latin America:

Given the rapid growth of regulated markets and new potential emerging markets, SiGMA Americas strategically planned its inaugural event to connect its extensive network in the West with leading suppliers, operators and affiliates in Latin America. The next edition of SiGMA Americas �C BiS is set to take place on June 15-17 at the Transamerica Expo Center in S?o Paulo. Join us for SiGMA Americas �C BiS.