In Brazil, a proportion of 10% from the tax revenue generated from sports betting will be allocated for funding healthcare services.
In about six months, betting on sports will become lawful in Brazil, and a system of licensing will be implemented. The Brazilian administration is currently contemplating how to deploy the budget derived from the tax on sports betting. There's a suggestion of allocating 10% of it to the ailing health system in the country.
Allocating 10% of the revenue to the health sector
From January 1, 2025, sports wagering will be legal in Brazil. The tax on sports betting is set to be 12%. How these additional incomes will be utilized by the Brazilian government is currently under debate: a bill [Link in Portuguese] is under consideration in Parliament.
This bill suggests a substantial shift in favor of the health sector compared to earlier proposals. Previously, it was planned to invest only 1% of the tax revenues from sports betting in the health sector. The new bill proposes an increase to 10%.
The reason for this is the potential negative effects of gambling and sports betting on the health system in Brazil. The government needs a larger budget to support the health sector, for instance, providing enhanced psychological care for individuals struggling with gambling addiction.
The bill explains this as follows:
This redistribution is balanced and aims to effectively utilize the collected resources to counteract the negative impacts of betting, strengthen the mental health care system, and encourage prevention and control.– Ismael Alexandrino, Member of Parliament in Brazil, Câmara dos Deputados**
The health sector urgently needs more resources
Recently, the Brazilian government has reportedly provided scant assistance to the health sector. Many health facilities are in a state of disrepair.
Even the compensation for medical professionals is said to be unappealing, resulting in doctor shortages in several areas. Additionally, waiting times are often lengthy, and the medication supply is inadequate. Moreover, the aftermaths of the COVID-19 pandemic continue to burden the health system in Brazil.
The new bill and the increased investment in the health sector could improve the situation in the long term.
The majority of the funds will be allocated to the tourism sector
However, the bulk of the tax revenues will be invested in the tourism sector. This represents 28% of the taxes from sports betting, a decision that has been public knowledge for several months.
Originally, it was planned to invest 22% in the tourism board and 8% in tourism agencies. Due to the increased investment in the health sector, the tourism sector will now only receive 19% of the tax revenues.
The Brazilian Minister of Tourism believes that the industry is in urgent need of a boost and is heavily dependent on this funding. The gambling industry is also reportedly supportive of the higher investments in the tourism sector.
Despite being the largest country in South America, Brazil has only attracted 5 to 6 million foreign tourists annually in recent years. Representatives from the gambling industry are said to hope for increased visitor numbers, which could also benefit their businesses.
After sports wagering becomes legal in Brazil on January 1, 2025, a significant portion of the 12% tax revenue will be allocated to the health sector, increasing from the initial 1% to 10%. This decision aims to combat the negative impacts of gambling and provide enhanced psychological care for individuals struggling with addiction.
Given the current state of the health sector in Brazil, with scarce assistance, disrepair in facilities, unappealing compensation for medical professionals leading to doctor shortages, and lengthy waiting times and inadequate medication supply, the increased investment could greatly improve the situation in the long term.
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