iGaming Daily

Fernando Noodt (00:00.128)
If you were trying to take a break from what's happening in Brazil, well, I'm afraid you will not be able to take a break from what's happening in Brazil because a lot is going on and we are here to go deep into everything new in the Brazilian market. Welcome to iGaming Daily. I'm Fernando Noodt, business journalist for SBC Noticias and your host for today's episode. And I am joined today by business journalist for SBC Noticias Brazil.

Elisa Marcanti, Elisa how are you today? Hello, how are you Ferd? I'm okay, all good here. Nice, nice. And also to talk about Brazil, of course Ana Maria Menezes, business journalist also for SBC Noticias Brasil. Ana, how are you? Hello Ferd, always glad to be here, especially to talk about a topic that is so interesting to me, that it's about taxation. Yes, taxation seems to be all over.

Latin America right now and Brazil is not the exception. There's a lot going on in Brazil and taxation is definitely on the table and we will discuss it. But first, let's thank OptiMove, the number one CRM marketing solution for the iGaming market and sponsor of iGaming Daily. Thank you OptiMove for being with us every episode and let's just jump into it because while Brazil has enforced its new gambling regulations, there are still a lot of things to go over.

They are discussing a lot of stuff in Congress, which is debating actually potential amendments to the legislation that has already been enforced. And this week, the special department of Federal Revenue of Brazil, the Riseta Federal. Actually, I'm not going to make an effort anymore to say the R like Brazilians do because I have failed catastrophically. can't pronounce anything anymore.

But yeah, the Special Department of Federal Revenue in Brazil took center stage this week as its secretary spoke before lawmakers and left some people actually scratching their heads, Yes. First of all, Fede, your pronunciation was just fine. You don't need to worry about that at all. I appreciate it. It was just fine. You don't have to worry about that. But on March 11th, we actually had the first meeting of the year for the Parliament Inquiry Commission, as we call it, the CPI.

Fernando Noodt (02:24.044)
that investigates how the betting sector is affecting family budgets. And we call it CPI, CPI does bets actually. And this time, Robson Barrerinhas, he's the special secretary of Receita Federal, so the Brazil's federal revenue service. And he spoke to the commission about the federal revenues reports after the first few months of the tax collection. So the market opened officially in the beginning of the year since January 1st.

and they are collecting the data right now. And something that came up during the meeting was the retroactive taxes. In 2024, retroactive taxes were authorized by the Supreme Court. And so it's possible right now to review decisions regarding tax payments. And each case, of course, needs to be revealed and analyzed by the court. And it's a very careful process. And this is it's so important for the Federal Revenue Service, resita federal.

to be transparent with their findings. So this expectation regarding the tax collection and how much money Brazil is actually making from this industry is so important to us. We're gonna have some pretty important findings and results after a six month period after, of course, the Receita Federal gets all these informations. And regarding the possibility of the retroactive tax,

on companies that were operating Brazil between 2018 and 2024. The secretary was pretty clear and he said in his opinion, anyone who was physically here in the country in Brazil operating materially or even informally is still accountable to Brazilian tax authorities. So this is something that should be taken into account after this six month period that is, and Elisa, I know that she's going to talk a bit more about it. So I'm not going to jump.

into that. But so for the betting industry from 2018 to 2024, we had no taxable event for online betting activities. And from 2018 to 2023, it was simply unknown to us how much taxpayers would have to pay in taxes. And any other interpretation for some lawyers that we actually talked to would be inconstitutional. So this is a very

Fernando Noodt (04:42.982)
sensible topic because it could violate the principle of tax legality that is enshrining the constitution. So this is a topic that we still need a lot more development to it and we cannot have it without the data concerning the tax payments from the companies for a couple of months. Yeah. You say there is a lot of stuff to develop yet about this whole topic, but this has actually been in development.

for some weeks because it has already been on the table, the retroactive tax, mean, Elisa. Yeah, it's true. The Federal Revenue Service of Brazil, obviously, and the Secretariat of Prices and Betting of the Ministry of Finance published an ordinance establishing the creation of an intersecretarial working group called GTIBets to monitor the sector in Brazil.

So the GTI BADS aims to oversee whether the operations are in compliance with the legislation and identify potential irregular activities of unlicensed companies in the country. However, the publication of this document has arisen a question. Will retortive taxes be charged to licensed operators in Brazil? Felipe Rodrigues, lawyer and CEO of Jogo Positivo,

explained that the ordinance does not make it clear whether the tax obligations related to the period prior to the authorization refers to direct payment of taxes or to procedures and measures that insurance these taxes are correctly calculated, monitored and controlled. While the first obligation mentioned involves the amounts to be paid to the government, the second relates to the bureaucratic... I have it.

a hard time saying this word, and the administrative actions necessary to ensure that this payment is made correctly and transparently. But yeah, like Ana said, there were some lawyers in the industry that were surely not happy at all about this whole retroactive tax, were they? Yeah. Andrea, with a lawyer specializing in regulatory and compliance matters.

Fernando Noodt (07:01.528)
clarifies that the aim of the ordinance is allowed to GTI BATs to present a proposal to regularize the tax obligations of fixed odds betting operators that operated in Brazil before obtaining their license in 2024. The proposal seeks to analyze what should have been collected fiscally during the period when these operators provided sports betting and online gaming service in the country.

Although the initiative to study the operator's fiscal compliance is not surprise, she said she emphasizes the need for caution when addressing legal issues such as statute of limitations, tax base, and tax legitimacy. WEDA also advocates for transparency in the studies, the participation of licensed operators in the discussions, and above all,

respect for the regulations enforced at the time to ensure legal and protection of the rule of law? Well, I'm sure that gaming lawyers will continue to analyze this situation because when it comes to regulation and different things that affect the regulation the government has already passed, there's a lot of potential challenges that may come up like with this retroactive tax. So we'll have to hashtag

Brazil wait and see because there's a lot to discuss in the future. But back to what we were talking before, the secretary mentioned some estimates around the money raised by the gaming industry and there's some other complicated issues that happened around the special department of federal revenue in Brazil. Ana? Yes. So, Hovinsson Bahirinius also mentioned that

When he was asked actually about the amount of money that the government lost due to the lack of regulation in the sector, he mentioned that it could be more than three billion reais, which would be right now around more than $500 million. And this is a huge amount of money and it could be more than that. So we're also gonna have the specific numbers around after this six month period.

Fernando Noodt (09:27.948)
we're only going to have the specific numbers after that. But the secretary emphasized that they finally have the numbers that they didn't have before. So having the regulation system is the best thing that could have happened to Brazil right now, because we can have the information about before. So the money we lost, we can have the regulation for the future and the present can be a bit more stable. So stability is something that is very important when we're talking about.

a full market and one of the biggest markets in the world. And something else that also Bahirinha has mentioned during the CPI, the Federal Revenue Service was pushing to actually charge the players during the income tax. So the ER in Posto de Reina, as we call it in Brazil. However, the Congress did not include that when they were discussing the tax service. And he was pretty, how can I say this, not upset exactly.

but he told them just like, yeah, this whole tag system that is happening, we suggested a way to help you with that and you did not listen to us. So this was also a sort of a climate that raised during the meeting. And it was kind of weird singing live because I was watching the full audience. It's just...

It's a politics game, of course, but seeing how the tax system is working and the options that they're giving and they are also taking away. So since the federal revenue service suggested, let's charge the betters because this way in his views withholding income tax would not be about the revenue collection. It would be a way to discourage betters and make them reconsider gambling. But in a way.

for the companies would this be okay? Would this not be okay? And we had Columbia as an example as well. So there's a Colombian company that's also covering the costs that the government's pushing on bettors. We have in South America other examples of that too. So it's all a big connection and we're still, we're gonna have to hashtag wait and see how Brazil is gonna deal with that and how the companies are gonna protect the players as well, the bettors.

Fernando Noodt (11:40.718)
depending on the decision that the government decides to make. Yeah, make sure you subscribe to SVC Noticias Brasil newsletter to keep up to date with all that's coming with the retroactive tax and stay with us because we will talk about what Ana mentioned about Colombia and the VAT. So let's do a very quick ad break and we'll be right back.

And we are back with iGamingDaily and of course, not everything in Latin America is Brazil. Of course, there's a lot going on in Brazil, but there's a lot of other things going on in the rest of Latin America. So now let's do a little breakdown of what's going on in the rest of Latin America. And Ana mentioned when talking about taxation in Brazil, the new BAT imposed in Colombia, there's a 19 % BAT tax.

that the industry is very worried about. And its main concern is how this will impact the industry in terms of having the bettors moving to the unregulated market. Because now that they have to pay an extra 19 % on their bets, they will say, hey, I'm getting less money. I'm putting 10, and I'm not getting 10. I'm getting just over 8. So the industry's concerned these people

might say, hey, I'm going to go to an unregulated operator, an illegal site and bet there because I will put a hundred there and I will get a hundred. I will put 10 and I will get 10. But what the industry has come up with is something like Luchia Colombia has announced this week, which is that it will take the hit themselves and absorb that extra cost. How will they do that? They will actually

and offer a 19 % bonus for deposits over 10,000 Colombian pesos. if you bet or deposit 15,000, you will get charged the 19 % BAT, but LUCIA will refund that through a special bonus specifically designed to counter that money loss. So the bettor won't lose the 19 %

Fernando Noodt(13:57.57)
from the tax, but it will be actually LUCIA Colombia in this case. And it's something that's take Colombia has also done in a similar fashion a few days ago. So that's definitely something to look up to how to counter this BAT tax in Colombia that has the industry very, very worried.

I know that our listeners are not very used to listening to my voice asking the questions but Fer now you're on the other side and we're gonna stick to the Texas. Please tell us, are there any other updates on Peru? Yeah, let's do some role switch here. Yes. Because we have to talk about Peru because the government revealed it has collected 10 million soles, which is roughly 2.7 million dollars maybe, in February from the new

ISC, the consumption tax that was enforced recently. We have talked about this in the past on iGamingDaily, so make sure after this episode you go find those episodes where we discuss Peru in detail and make sure you subscribe to SBC News, keep up to date with what happens. But the government said there's 10 million soles or 2.7 million dollars that have entered the state coffers after enforcing this

new consumption tax. But let's remind our audience that this was first a 1 % tax and then it was amended to be lowered to 0.3%. That's until July. So for the first six months of the year, it will be a 0.3 % tax. But this was only enforced a few weeks after they first enforced the 1 % tax. So these 10 million soles come from that 1 % payment, which was already

happening when they amended the new tax. So the money raised by this tax in the future will be lower at least until next July when it goes back up to 1%. And also I spoke to some Peruvian specialists in SBC Summit Rio and they were telling me how the industry is upset about it. Everyone is really concerned about what impact this will have on the industry. Like Colombia, it's a different type of tax, but it has the industry concern.

Fernando Noodt (16:18.146)
all the same so you can surely expect some actions coming from the gaming news industry in the future and again make sure you are subscribed to SBC Noticias newsletter because you will hear it from us first so stay alert on Peru for sure yes you heard the specialist I don't even need to say anything more about it but we talked a lot about Texas and I think we need to know stick a bit to the ground floor and this is why

We're going to talk a little bit about Landbase Casino. And do you have any updates for us, Fed, about the Landbase Casino industry in Latin America? Yeah, there's actually two major stories for Landbase Casino. And let's keep it short because we want to wrap this episode up. Not that we don't like being with you guys and having their industry listening to our lovely voices and seeing our lovely faces because they can see our lovely faces now. If they follow us on TikTok, you just have to search for iGamingDailyPodcast on TikTok.

sure need to go ahead and do that. But speaking of land-based casinos, the Chilean justice system has accepted Corporacion Mayor, which is a Peruvian group, it has accepted its request to participate in a lawsuit against Dreams, Marina del Sol, and enjoy in the the collusion case. There's an alleged collusion situation going on in Chile. There's an ongoing investigation, of course, to determine whether they did agree.

or not to only compete in the state casino licenses that they already control. So to rephrase that, these companies are being accused of allegedly saying, hey, let's just push for the licenses we each already have. So if Anna has A, she will push for A. If I have B, I would push for B. And if Elisa had C, she would push for C.

So that's the accusation against Enjoy Marina de Sol and Dreams. They of course have denied everything, but Corporacion Mayor has been included in the in plaint in the accusation against them. So we'll have to of course wait and see what happens with this very serious accusation. And speaking of land based also in Argentina, the Loteria de Cordoba, the Cordoba Lottery, which is the regulator in that province has

Fernando Noodt (18:41.87)
announced the winners of the bidding process for their provincial-owned casinos and CET, Bolt and Casino Victoria have acquired most of the licenses but there are some licenses, 10 casino licenses that had no interest and an extra one that didn't have a good enough offer so there's 11 state-owned casinos that will remain under control of the state which doesn't discard or is

actually considering to do a new bidding process so there might be a new bidding process coming for land-based casinos in cordoba so stay alert on what happens in cordoba as well as what happens in chile but now i'm taking back over this episode i'm taking my host privilege back because we need to wrap this up i would like to thank you ana maría for covering for for me in this past five minutes you did great

Thank you Ana Maria Meneses, thank you very much Elisa Marcanti and thank you very much James Ross for producing these episodes to all our listeners out there I'll say goodbye and we'll see you in the next one.