The second year of operation of the regulated fixed-odd betting market in Brazil consolidates robust numbers inherited from 2025, with 83 licensed companies, 29.4 million active users and R$37 billion collected into public coffers.
However, a new study by LCA Consultoria, commissioned by the Brazilian Institute of Responsible Gaming (IBJR), raises a warning for the sector: the progression of Tax Reform will increase the tax burden on legal operators from 32% to 42% by 2033.
In this sense, for the industry, the key to increasing state revenue should focus on repressing illegal activity, and not on the financial suffocation of formal platforms that have already received grants of R$30 million.
How escalating taxes threaten the viability of legal operators
The LCA projection details that the replacement of taxes such as the Social Integration Program (PIS/Cofins) and the Service Tax (ISS) with the new Tax on Goods and Services (IBS) and Contribution on Goods and Services (CBS) will weigh disproportionately on iGaming companies.
According to Eric Brasil, director of the consultancy, the sector will be 14 percentage points above the base rate of 28% predicted by the Ministry of Treasury.
Added to this, social allocation rates will jump from the current 13% to 15%.
Plínio Lemos Jorge, president of the National Association of Games and Lotteries (ANJL), warned about the risk of driving investments away from the country.
“If the rules of the game don’t change, it can continue like this, because that’s what the houses that came to Brazil were willing to do,” he explained.
“If it starts to always increase by 1% to 2%, soon there will no longer be a viable operation. Because companies arrive in Brazil based on a premise, it would be a breach of trust to change the rules of the game in the middle of the championship”, said the executive.
The risk of Selective Tax and the involuntary promotion of the clandestine market
The sustainability of federal revenue is directly linked to the competitiveness of the legalized market.
André Gelfi, director and co-founder of IBJR, highlighted that passing on excessive tax costs to the product will inevitably push consumers to illegal websites.
On the other hand, the data prove that the crackdown on piracy is highly profitable for the government: each 5% advance in market formalization injects around R$1 billion additional into the public coffers.
“The study showed that for every 5 percentage points of market formalization, the country could raise around R$1 billion additionally”, he pointed out.
Another critical point on the horizon for operators is the incidence of the Selective Tax (the so-called “sin tax”), scheduled for 2027.
Gelfi argued that the taxation reflects a legislative lack of knowledge about the nature of fixed-odds bets, which differ drastically from state-run lotteries, where the government retains the majority of the amount collected.
“Due to ignorance, they want to apply the same dynamics with betting”, concluded the director, reinforcing the urgency of protecting the legal ecosystem.