Brazilian gambling associations warn that increased taxes could lead to market exit
Six associations representing the gambling sector have expressed concern about the potential increase in the tax burden on legal operators in Brazil. The joint statement was released on Tuesday (June 3, 2025), in response to the proposed fiscal compensation following the revocation of Decree No. 12,466, dated May 22, 2025, which had raised the rate of IOF (Tax on Financial Transactions) on international remittances from 0.38% to 3.50%.
The document was signed by ABRAJOGO (Brazilian Association of Games and Lotteries), ABFS (Association of Bets and Fantasy Sports), AIGAMING (International Gaming Association), ANJL (National Association of Games and Lotteries), IBJR (Brazilian Institute of Responsible Gaming), and IJL (Brazilian Institute of Legal Gaming).
In a statement, they highlighted that licensed operators are currently burdened by a heavy tax structure, which includes up to 26% in taxes on gross revenue plus an additional 34% on profits. Operators also face monthly supervision fees that can reach around R$ 2 million each.
They cautioned that the impending transition to a new tax model—is anticipated to increase this burden by an additional 13% on gross revenue. This would further elevate the already substantial tax load, making it one of the highest in the world for this industry.
The statement also highlighted that it was important to note the recent approval of the Selective Tax on the sector, which is yet to have its rate defined by lawmakers. However, it is expected to bring the industry close to a tax burden of almost 50%, jeopardizing the economic viability of the regulated online gaming sector in Brazil.
Furthermore, they argue that companies function under rigorous normative, technical, and compliance regulations, fully adhering to the requirements set by the Secretary of Prizes and Bets of the Ministry of Finance (SPA/MF). These requirements encompass rules aimed at preventing money laundering, combating result manipulation, promoting responsible gaming, and ensuring technological standards.
“In this scenario, it is unjustifiable—from any technical, economic, or public policy perspective—to impose new tax burdens on a sector that is already extremely taxed and contributes significantly and responsibly to the country, under penalty of making the activity unviable. The adoption of measures that compromise legal operations tends to provoke the opposite effect of what is desired: the strengthening of clandestine platforms that do not collect taxes, do not comply with regulatory standards, and expose consumers to risks of fraud, gambling addiction, and other vulnerabilities, as has been observed in recent decades.”
The statement went onto say that: “International experiences, such as those in Italy and Spain, have already shown that excessive taxation in newly regulated markets leads to the expansion of the illegal market, resulting in lost revenue and reduced regulatory effectiveness . . . Therefore, increasing the tax burden on legalized operators directly jeopardizes the continued operation of companies in the Brazilian market—many of which are already considering returning their licenses and ceasing operations in the country. This exit strengthens the competitiveness of illegal houses, undermining the central purposes of the regulatory framework: ensuring revenue collection, protecting consumers, and promoting the integrity of the system.”
The statement concluded by saying that: “It is imperative to reaffirm that efficient taxation is not synonymous with confiscation. Compensating for momentary fiscal losses with disproportionate increases in the burden on a sector still in the process of regulatory consolidation undermines the very objective of public policy: channelling consumers into a safe, legal, regulated, and socially responsible environment.
“Brazil currently has a historic opportunity to consolidate a mature model for regulating gambling, with high revenue capacity, a commitment to market integrity, and citizen protection. It is essential to avoid irreversible setbacks.”
