BetMGM Brazil’s head of legal, Eduardo Ludmer, has called on the Brazilian government to engage with the regulated market before the proposed GGR tax rise to 18% is signed into law.
Brazil launched its regulated sports betting and igaming market on 1 January 2025 with a tax rate of 12%.
Operators paid BRL30m (£3.8m) for a five-year licence, allowing each licence holder to launch three brands in the South American country.
However, just six months into the market going live, it was made public that Brazil’s Ministry of Finance approved a provisional measure to increase the tax rate to 18%.
Speaking during a panel session during iGB L!VE yesterday, 2 July, Ludmer highlighted that was no engagement with licensed operators on the matter prior to news of the proposed tax rise being made public.
It is understood that the 50% hike in GGR tax came as an alternative to raising Brazil’s Financial Transactions Tax from 0.38% to 3.5%.
Noting that tax is already a “burden” on those operating in the market, Ludmer urged the government to converse with the stakeholders before making a final decision.
Ludmer said: “We have had seven months of the regulated market and we are still debating whether gaming in Brazil will continue to be tolerated.
“We just had the provisional measure approved that is supposed to come into effect from October, increasing the tax burden from 12% to 18%.
“This is not what the market asked for. There was no dialogue [with the industry] and we are very concerned. The current tax burden is already heavy enough on operators.
“They pay not only the 12% but they pay all the other taxes that any corporate entity pays. So seven months down the road, the government decides to change that, not based on research or a serious study – it is very problematic.”
Alongside the proposed 18% rate, trade bodies have suggested the effective tax paid by licensed firms could sit between 50% and 60% due to various other levies operator have to endure.
Ludmer also raised concerns surrounding the country’s Prizes and Betting Secretariat’s (SPA) decision to hand out provisional licences when the market regulated at the start of the year, highlighting that the “legal uncertainty” of this and other last minute decisions added to the confusion in the regulated market.
He remarked: “We have many other examples of legal uncertainty that makes it even more challenging to do business in Brazil.
“For example, there were 14 companies that got a permanent licence as of 1 January 2025 and it was not written anywhere that operators could operate using a provisional licence.
“Then on 1 January, there was a new decision saying that all the other operators who did not get a definitive licence could operate under a [provisional licence].
“We need legal certainty to make sure that we know we can invest, create jobs, plan and make the market grow.”
Research conducted by The Locomotive Institute found nearly three quarters (73%) of players admitted to gambling with at least one unlicensed operator this year in Brazil.
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Eduardo Ludmer notes provisional measure to raise levy from 12% to 18% was put forward without consulting with the regulated market, as he warns of the knock-on effects of the policy
The post More discussion needed on 18% GGR tax plans in Brazil, states BetMGM head of legal first appeared on EGR Intel.