Brazil’s government has suggested raising the tax on online betting companies in the country, but faces strong opposition from operators.
The plan, led by Finance Minister Fernando Haddad, is to raise the Gross Gaming Revenue (GGR) tax on sports betting from 12% to 18%. A coalition of trade associations representing the gambling industry called the proposal “unjustifiable from any technical, economic or public policy perspective.”
Haddad proposed the changes to generate more tax revenue for the country after canceling plans to increase the Financial Transactions Tax (IOF).
Brazil regulated its gambling market in January this year and collected R$755 million ($135 million) in taxes from betting between February and April. The country implements a complicated tax system with 12% on GGR, plus a further 9.25% social tax, up to 5% local tax, and 34% corporate income tax. This means that the increase to 18% could make the burden on betting companies as much as 50-56% on revenue.
Betting companies speak out against the tax hike
A joint statement was issued by six trade associations with interests in Brazil’s betting market. The six groups are:
- Brazilian Institute of Responsible Gaming (IBJR),
- 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 Legal Gambling (IJL).
The IBJR includes major global betting operators (Bet365, Entain, Flutter, Betsson, LeoVegas, KTO, etc.), representing about 75% of Brazil’s regulated market, and issued the statement on its website.
The statement noted that “it is unjustifiable — from any technical, economic or public policy perspective — to impose new tax burdens on a sector that is already extremely burdened and contributes significantly and responsibly to the country,”
The IBJR goes on to say that evidence from Italy and Spain shows that “excessive taxation in newly regulated markets leads to the expansion of the illegal market, with a loss of revenue and a reduction in regulatory effectiveness.”
Aiming to curb the illegal market, Italy and Spain’s gambling regulators have been active in trying to shut down operators. The Italian regulator (ADM) shut down 9,800 unlicensed websites in 2023. Meanwhile, the Spanish gambling authority (DGOJ) imposed fines of €65 million ($74 million) in late 2024, penalizing 15 unlicensed platforms.
Unregulated market over double regulated betting
In the statement, the IBJR noted that Brazil’s unregulated gambling market, including offshore betting sites, generates more than double the revenue of regulated operators. In the first quarter this year, licensed betting companies generated R$3.1 billion ($560 million) per month, compared to estimates of around R$6.5 billion ($1.1 billion) for unregulated gambling sites.
Since late 2024, Brazilian authorities have blocked over 2,000 offshore gambling sites, but approximately 83% of blocked sites remain accessible through workarounds such as VPNs or mirror domains.
The already slow switch of players from unregulated to regulated operators will be further increased by the tax hike, argues the betting industry.
The topic is set for discussion in Brazil’s Chamber of Deputies and the Senate, along with the Government’s economic team.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
