A survey by LCA Consultoria, commissioned by the Brazilian Institute for Responsible Gaming (IBJR), paints a challenging picture for the regulated betting market.
The projection is that the tax burden on the sector will jump from 32% in 2025 to 42% by 2033, when the Tax Reform is fully implemented.
Last year, the first year of the regulated market, companies generated approximately R$ 37 billion in revenue and contributed nearly R$ 11 billion to public coffers.
However, the study released by Poder 360 indicates that the current structure already consumes a third of the gross revenue of these establishments, and the trend is expected to worsen.
Social security contributions, which currently account for 12% of revenue, will gradually increase to 15% by 2028.
Tax exchange
The increased tax burden will come with the replacement of current taxes. Starting in 2027, PIS and Cofins will cease to exist, giving way to the Contribution on Goods and Services (CBS).
By 2033, state and municipal taxes (ICMS and ISS) will be fully absorbed by the new Tax on Goods and Services (IBS).
The report also highlights an inequality: while betting companies pay 27% in federal taxes, sectors such as Information Technology pay 15%.
What the experts say
André Gelfi, director, advisor and co-founder of the Brazilian Institute for Responsible Gaming (IBJR), comments on the risks of the increases.
“Raising taxes on law-abiding citizens is a direct incentive to the black market, which already drains R$ 10.7 billion from the Brazilian economy without offering any protection to the citizen,” he explained.
“Excessively taxing the legal sector is, in practice, handing the Brazilian consumer over on a silver platter to pirate websites that finance organized crime,” the director pointed out.
According to Eric Brasil, economist and director of LCA Consultoria, frequent increases in the tax burden on betting sites make it difficult to combat the illegal market.
“Several studies show the importance of a competitive tax burden as part of the strategy to combat illegal activity.”
“Our priority should be reducing illegal activity, protecting consumers and, consequently, increasing revenue through regulated operators. However, we are choosing the opposite path,” he said.
