The Brazilian Institute of Responsible Gaming (IBJR) has warned that the tax rise on Brazil’s licensed betting sector risks pushing players into the black market, ahead of Tuesday’s vote.
Back in June, the Brazil government published a provisional measure raising the tax on operators to 18% of GGR, from the previous 12%.
PM No 1,303 is set to be voted upon by the provisional measure’s committee on Tuesday, when politicians will decide whether to make the tax rise permanent.
The vote was supposed to take place last week but was twice postponed. The deadline for the tax to be approved by the committee and the Senate and Chamber of Deputies is this Wednesday.
The tax increase has caused widespread concern among the industry and, ahead of Tuesday’s vote, the IBJR has again warned that the tax rise risks boosting black market activity.
This could lead to hugely damaging consequences for players, who will not receive the same levels of protection in the black market as they do from the licensed operators who follow Brazil’s regulations.
The IBJR assesses PM 1,303 “exposes not only the sector, but also bettors to increasing risks of migration to clandestine operators”.
The association is also calling for digital platforms such as social networks and search engines to take a harder stance on illegal betting sites, with the “same rigour already applied to other illicit content”.
Tax rise risks affecting investment into Brazil’s betting sector
Additionally, the IBJR believes the 50% rise in the tax rate at such an early stage of Brazil’s regulated betting sector will lead to hesitation regarding investment into the market.
Brazil’s licensed betting sector launched on 1 January and, alongside this tax rise, the government is also weighing up whether to implement further restrictions on advertising.
“Abruptly changing taxation, increasing the contribution rate on gross revenue from 12% to 18% just eight months after the regulation was enacted, creates legal uncertainty, undermining the confidence of companies that have invested in the country,” the IBJR said.
“This instability threatens not only the continuity of operations but also the credibility of the business environment in Brazil.”
IBJR searching for new executive president
In September, the IBJR announced that its executive president Fernando Vieira was leaving his role in pursuit of a new professional opportunity.
Vieira had been in the role since March, having first joined the IBJR in October 2024.
Over his tenure, Vieira conducted important work in fighting the black market, which is often identified as the primary concern by licensed betting operators in Brazil.
The IBJR praised Vieira for his “decisive contributions” and the trade body is now searching for his successor.
André Gelfi, one of the IBJR’s founders and managing partner of Betsson Group in Brazil, is serving as interim executive president following Vieira’s departure.
The Brazil government has until Wednesday to make permanent a 50% tax rise on licensed betting operators.