Rafael Marcondes, president of ABFS (Brazilian Fantasy Sports Association), said in an interview with Poder 360 that half of the money spent on sports betting is on the illegal market. In addition, he advocated greater oversight by the authorities, especially the Ministry of Treasury and the Coaf (Financial Activities Control Council).
The lawyer works in the areas of tax, sports and entertainment law. He also has a doctorate and master’s degree in tax law from PUC-SP (Pontifical Catholic University of São Paulo) and a specialization in sports betting management. In addition to being legal director of Rei do Pitaco.
“We estimate that around 50% of the betting amounts in Brazil are moved by the illegal market. This is not monitored, is not controlled, and is not accountable to the government, more specifically to regulatory bodies such as Coaf, the Ministry of Treasury and the Ministry of Sports”, said Marcondes.
For him, with the recent regulation, any regulatory cycle needs to mature. Therefore, it takes time to assess whether the measures are sufficient.
“The exploitation of this [illegal] market does not follow rules and occurs in an abusive manner. These abuses and extrapolations committed by illegal operators end up tarnishing the image of the Brazilian betting market” , he said.
Tax burden on sportsbooks
The federal government has proposed increasing the tax burden on sportsbooks. However, in a manifesto by six associations representing the sector, published on June 9, the ABFS argues that the increase in the tax burden is “unjustifiable”.
Thus, the association states that the expected tax and social contribution for the year 2025 will exceed R$4 billion. The economic team calculates that the increase from 12% to 18% of the rate on sports venues will result in R$1.98 billion for the government in 2025 and 2026.
“This increase in tax burden is somewhat worrying for the betting sector, because, when we think about the rate from 12% to 18% in isolation, we have to consider that it is an increase in a specific tax, which is charged additionally to the sports betting sector and has no parallel in other sectors”, said Marcondes.
According to Marcondes, betting houses pay the following taxes:
- IRPJ (Personal Income Tax);
- CSLL (Social Contribution on Net Profit);
- PIS/Cofins (Social Integration Program and Contribution to Social Security Financing);
- ISS (Tax on Services).
“We cannot ignore that the sector has a series of other tax burdens, as well as corporate taxes paid by any service provider company,” stated the president of ABFS. “We already have a tax burden, without considering this increase, of around 42%,” he added.
The president of ABFS said that the consumption tax reform, approved in 2023 and regulated in 2025, will replace a series of taxes, including PIS/Cofins and ISS. He stated that “naturally, this should generate an additional burden for any service provider”.
He added: “We estimate an increase [in the tax burden] of around 13% on gross revenue. Not to mention that Congress has just approved a Selective Tax specifically on the betting sector and there is still an open rate, yet to be defined”, he concluded.
