Amid plans from the Brazilian government to heavily tax Brazil’s betting sector, Plínio Lemos Jorge, president of the National Association of Games and Lotteries (ANJL), has suggested the government is exploiting the sector to help it reach broader fiscal targets.
“Throughout [2025], the sector was treated at various times, as a kind of ‘quick fix’ for the country’s budgetary challenges, which raised an important red flag,” Lemos Jorge tells iGB.
“Initiatives of this nature, when poorly calibrated, jeopardise precisely the objective of regulation: to strengthen a transparent, safe and economically viable market. It is a contradiction to weaken the regulated market precisely at the moment when it is beginning to structure itself,” he adds.
A staggered gambling tax rise is on the way in Brazil, with the GGR-based rate increasing to 13% later this year, before jumping to 14% in 2027 and 15% from 2028.
Operators also pay various other contributions alongside taxes, including a 9.25% PIS/Cofins levy and municipal taxes up to 5% of each player deposit. The new gaming tax could push the sector’s overall burden up to around 50%.
Lemos Jorge believes the licensed gambling sector was unfairly targeted by the government in 2025 as it looked to plug budgetary holes. This was despite the licensed market being in its infancy and tackling new regulatory requirements, after launching on 1 January 2025.
Excessive taxation risks pushing players to the black market
According to Lemos Jorge, tax represents one of the primary threats to the sustainability of the regulated market in Brazil.
Like many, Lemos Jorge is concerned that overly burdensome taxes risk increasing the attractiveness of the illegal market.
“We have reiterated that excessive taxation produces exactly the opposite effect to that intended: it encourages bettors to migrate to illegal platforms – many of them operated by criminal organisations with international reach – reduces revenue and weakens companies that have opted for legality,” Lemos Jorge continues.
Of particular concern is the government’s Anti-Faction Bill, which proposes the creation of a 15% tax on player deposits to licensed operators. A vote on whether to progress the CIDE-Bets tax is expected in the next few months.
“Although the project’s stated objective is to combat criminal organisations, the over-taxation of the regulated market tends to produce the opposite effect,” Lemos Jorge suggests.
Tax increases could kill smaller operators
Lemos Jorge believes the most “sensitive” point is that tax is increasing while the market is still in its early stages and consolidation is in process. This could damage the legal certainty of the market and cause companies to divest due to a lack of confidence in Brazil.
The tax rise could be particularly harmful to smaller operators that don’t have the financial support of the giants leading the market currently.
“Today, about 80 companies have licences to operate in Brazil, but the impact would not be homogeneous,” Lemos Jorge says. “Large operators tend to have a greater capacity to absorb cost increases, medium-sized companies will need to work much harder to remain competitive and the smallest companies run a serious risk of not surviving.
“An excessively concentrated environment, with a very small number of authorised companies, goes against the objectives of regulation,” Lemos Jorge adds.
“Having only a few operators in the regulated market in 2026 weakens competition, reduces innovation and may even compromise the credibility of a regulation that was carefully and technically constructed.”
The ANJL’s president is concerned the government is unfairly targeting gambling as a solution to plug gaps in its fiscal budget.