From the dream of a regulated online betting market to the uncertainty generated by the likely tax hike in a few months, ABRAJOGO president Witoldo Hendrich Jr. analyzed these and other issues that directly impact the present and future of the iGaming industry in Brazil.
“I see it as president of ABRAJOGO, but also as a market professional, because the demands end up coming from both sides, but in some points they coincide. The worst thing that’s happening isn’t a regulatory problem; it’s a problem for Brazil. It’s endless uncertainty,” he stated.
“I’m going to change. I’m going to raise taxes. This legal uncertainty, fiscal uncertainty, political uncertainty. There’s no way to work seriously like this,” he added.
However, he made a point of sharing his joy at seeing the sector become a reality in the country. “Gambling is a reality in Brazil. We’ve spent decades fighting for it. So, I’m truly pleased to see that the business has succeeded. Large, reputable companies are interested in establishing themselves in Brazil,” he emphasized.
Increased taxation on the betting sector
Witoldo Hendrich Jr. condemned the planned October tax increase from 12% to 18%. “This is very bad. This doesn’t just affect the operator. All the contracts I’ve had contact with, all the contracts I’ve heard about, are all based on GGR minus 12%. If you change that to 18%, you affect the entire chain. This will be disastrous,” he explained.
He added: “Ultimately, this will translate into worse odds, because I have to pay fewer premiums of any kind. I have to pay fewer premiums to have a higher gross income to offset this increased tax burden. And when I start offering worse odds, the illegal market becomes even bigger.”
According to him, there are people actively working not only at ABRAJOGO, but across the industry. “We’re trying. When I say we, I’m not talking about ABRAJOGO, but about the associations in general. It’s a hopeless task. Because we won’t just be addressing 12% or 18%, since the implementation of tax reform is coming. We’ll have a selective tax. So, we have a few more battles ahead of us,” he noted.
A federation to represent the Brazilian betting market
Witoldo also spoke about the need to combat the wave of attacks and fake news related to the gambling market. “We’re trying this in a private setting. We, once again, the industry as a whole, is taking action through campaigns and statements,” he emphasized.
However, he again called for government involvement in educating and raising awareness among the population. “What I think would help would be if the government had a genuine interest in a healthy environment. The government could help with its institutional advertising; it could include this,” he stated.
The president of ABRAJOGO also revealed his intention to go a step further: to establish a federation to represent the entire national betting market. “Something I’d like to do with ABRAJOGO is to be able to focus on this. The idea was to bring together three or four associations and try to create a federation. We’re talking about it, it’s not easy. There’s a chance that we’ll be able to create this federation by the end of the year,” he emphasized.
Finally, Witoldo Hendrich Jr. expressed confidence in the Senate’s approval of the bill that allows for the legalization of land-based casinos, bingo halls, and horse racing. “The feeling about the Casino Bill, from what I’ve heard, is that it will be approved. I think within the next two months,” he concluded.