Brazilian Association of Games and Lotteries (ABRAJOGO), Betting and Fantasy Sports Association (ABFS), International Gaming Association (AIGAMING), National Association of Games and Lotteries (ANJL), Brazilian Institute of Responsible Gaming (IBJR) and Brazilian Institute of Legal Gaming (IJL) express strong concern about a possible increase in taxes on the betting sector in Brazil.
The entities disagree with the tax increase on operators legalized in the country. This measure appears as an alternative to offset tax losses. The offset arises from the possible annulment of Decree No. 12,466/2025. The decree increased the Tax on Financial Transactions (IOF) on international transfers from 0.38% to 3.50%.
The sector has demonstrated its commitment to legality since Law No. 14,790/2023. As such, licensed operators already pay high taxes today. Therefore, the tax structure includes up to 26% on gross revenue and this percentage adds up to 12% of Gaming Tax and 9.25% of PIS/COFINS.
In addition, up to 5% of ISS is levied on operations. Profits are subject to an additional tax of 34%. This rate combines 25% of IRPJ with 9% of CSLL.
Tax reform in Brazil
Monthly inspection fees reach R$2 million per company and the ongoing tax reform will increase this burden even further. CBS (Contribution on Goods and Services) and IBS (Tax on Goods and Services) are the new taxes created by the Brazilian tax reform currently being implemented.
They will replace the current PIS/Cofins (federal taxes) and ISS (municipal tax), unifying consumption taxation in the country. This change will increase taxes by 13% on revenue. Brazil already has one of the highest tax burdens in the world in this segment.
The recently approved Selective Tax is awaiting definition of its rate. Its implementation could increase the total tax rate to around 50%. This scenario threatens the economic sustainability of regulated online gambling in Brazil.
Distribution of amounts collected from bets in Brazil
The market currently has 79 authorized operators, and these companies have invested more than R$2.4 billion in concessions. The revenue expected for 2025 exceeds R$4 billion.
The funds are earmarked for sports, health, public safety, tourism, education and social security. The operators follow strict rules set by the Ministry of Treasury’s Prizes and Betting Secretariat (SPA/MF), which include controls to prevent money laundering, promote responsible gaming and combat the manipulation of sports results.
Furthermore, the imposition of new taxes on an already burdened sector lacks technical justification, especially when the tax burden may make legal operations unfeasible.
Consequently, these restrictive measures end up strengthening clandestine platforms that do not pay taxes or follow regulations, thus exposing consumers to fraud and other significant risks.
For example, Italy and Spain have experienced similar experiences with negative results. Excessive taxation has expanded the illegal market in these countries. As a result, there has been a loss of revenue and regulatory control.
Problems with irregular betting
Brazil is already facing this problem. The regulated market moved R$3.1 billion per month in the first quarter. Meanwhile, the illegal market operated between R$6.5 and R$7 billion. These amounts are completely beyond state control.
The tax increase jeopardizes the permanence of companies in Brazil. Several operators are considering returning their licenses and closing their operations. This exit will strengthen illegal bookmakers. The corporate exodus will undermine the objectives of the national regulatory framework.
Licenses were acquired under specific regulatory assumptions. These conditions underpinned business models and investments made. Abrupt changes can lead to litigation and systemic instability. Regulatory unpredictability drives away investments and compromises commitments made.
The signatory entities remain willing to engage in constructive institutional dialogue. However, they reject transforming the sector into a solution for fiscal imbalance. Rebalancing public accounts requires sustainable structural reforms.
These measures include reducing unproductive expenditure and allocating resources efficiently. They also involve regulating informal sectors and formalizing the digital economy.
Efficient taxation differs fundamentally from fiscal confiscation. Offsetting temporary losses with disproportionate increases undermines public objectives. The central purpose is to direct consumers to a safe and legal environment.
Brazil has a unique opportunity to consolidate mature gambling regulation. The model can ensure revenue collection and market integrity. It will also protect citizens and promote social responsibility. It is essential to avoid setbacks that compromise these regulatory advances.
