Brazilian regulator warns raised betting taxes won’t solve country’s fiscal issues
According to the Institute, higher sports betting taxes could push bettors into illegal markets.
Key Points
- Fernando Vieira, IBJR president, said the real solution is to combat the underground market, which accounts for up to 51% of bets in Brazil
- The illegal market generates an estimated BR10.8bn in lost revenue
- Vieira emphasized that increasing taxes only pushes players into the underground market, where there are no rules or protections, ultimately harming consumers
The Brazilian Institute for Responsible Gaming (IBJR) told the Senate that increasing betting taxes will not fix Brazil’s fiscal issues and continues to push bettors toward illegal markets.
At yesterday’s public hearing, Fernando Vieira, the entity’s President, stated that the real solution lies in tackling the underground market, which accounts for half of all bets in the country.
The hearing, held by the Senate’s Joint Committee reviewing Provisional Measure 1.303/25, considered raising the tax burden on sports betting. According to him, such a move could “undermine a newly regulated market and drive millions of bettors into illegality.”
He added: “There is a belief that the betting sector can single-handedly cover Brazil’s fiscal accounts. This is unrealistic. The combined revenue of the five largest Brazilian companies is almost 50 times greater than the entire licensed betting market’s revenue.
“It is disproportionate and represents a complete breakdown of trust in the regulator, considering the market has only been regulated for eight months.”
He clarified that betting companies do not pay just 12% in taxes, since that figure corresponds only to a specific contribution. According to him, when adding consumption taxes, the burden already rises to 28% under the Provisional Measure and exceeds 40% with the tax reform, not including the selective tax and corporate income taxes. This framework allegedly undermines sustainability, harming legal operators while boosting the underground market.
Today, the underground market already represents up to 51% of bets in Brazil, moving around BR40bn ($7.4bn) per year and generating an estimated loss of BR10.8bn in revenue.
Good to know: The IBRJ said the main challenge was the growing illegal betting market, which caused major revenue losses
He added: “For every 5 percentage points of formalization, Brazil collects an additional BR1bn. The most efficient way to increase revenue is to combat illegal gambling, not to suffocate those who are regulated and paying taxes,” said Vieira.
According to him, the direct consequence of overburdening the sector is further exposing bettors.
He concluded: “People will not stop playing, but in the underground market, there are no rules, no audits, no protection. Externalities increase, and the consumer is the one who loses. Our appeal is clear: the solution lies in fighting illegality, consolidating the regulated market, collecting revenue efficiently, and protecting the bettor.”
Tags/Keywords
- Brazil,
- Casino,
- LatAm,
- Legal,
- Regulatory
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