The full statement of the Brazilian Institute of Responsible Gaming (IBJR):
The Brazilian Institute of Responsible Gaming (IBJR) expresses its strong indignation over the increase in taxation for the online betting sector brought by Provisional Measure No. 1,303 published this Wednesday, June 11.
The measure is unacceptable and makes it unfeasible for many companies that trusted and invested in the regulated market to operate, creates legal uncertainty, and threatens public revenue.
At the beginning of 2025, just five months ago, legalized operators each paid R$30 million (US$5.5m) for a five-year license, totaling more than R$2.3 billion (US$ 415m) already collected.
The sector’s planning was structured based on the current 12% rate, and any change in the middle of the contract compromises the economic and financial balance and trust in the regulatory environment.
In light of this violation, IBJR will seek all means to defend the regulated market, including resorting to the judiciary.
The proposal does not solve the government’s structural revenue problem and will have a reverse effect: by increasing the tax on so-called ‘Bets’, the illegal market tends to grow from the current 50% to at least 60%, generating an estimated annual revenue loss of more than R$2 billion (US$ 360m).
The way to increase revenue is not to penalize those who operate within the law, but to rigorously combat illegality and protect bettors by following the sector’s regulations.
IBJR
The Brazilian Institute of Responsible Gaming is dedicated to promoting a culture of responsible and conscious gaming in Brazil.
The entity's include:
- Alfa
- bet365
- BetBoom
- BetMGM
- Betnacional
- Betsson Group
- Entain
- EstrelaBet
- Flutter Entertainment
- Kaizen Gaming
- KTO Group
- Novibet
- Skill on Net
And as associates:
- OKTO
- Pay4Fun
- Better Collective
- Clever Advertising
- OneKey Payments
- Volta Pra Marcar
- GeoComply
MP is right to curb illegal betting and wrong to promote a 50% increase in tax
Provisional Measure 1303 is right on target in trying to create barriers against illegal betting, but it imposes a 50% increase in the variable grant by increasing the tax on GGR from 12% to 18%. This is the opinion of industry leaders in initial conversations with GMB shortly after the publication of the MP.
“It is a breach of contract after five months of regulation and granting of licenses,” said one of them.
By imposing an increase from 12% to 18% in the tax to be paid by sports betting and online gaming operators, “the Executive Branch is opening the doors wide open to illegal betting, even though the MP includes measures to contain the growth of the black market,” said another industry executive.
With the change in taxation, total taxes could reach more than 50%, which makes the operation of licensed companies unviable. “This means that legal betting has little competitiveness in the face of a black market that still represents 50% of the total market,” the executive highlighted.
“This makes life even more difficult for the regulated market while the other one pays nothing in Brazil. It is an extremely unfortunate measure and a breach of contract 5 months before regulation and granting of licenses,” he added.
“Fixed-odds betting on sporting events was legalized in 2018 as a public service and called a “lottery modality” to protect the integrity of sports (especially football), in addition to protecting the consumer. The argument was never about revenue collection, although it did consider the social and economic benefits of an informal activity that would stop sending betting money (R$54 billion in 2023) abroad and would start to through the national financial system and consequently implement market control tools,” highlights a lawyer who has worked in the gaming and lottery sector for years.
For him, “it is not about increasing the tax burden, but about the variable grant, which allows the expansion of state lotteries with greater efficiency and results.”
If the Provisional Measure is approved as it is, it is expected that many players in the sector will concentrate their operations in state lotteries that have already regulated sports betting and online gaming, such as Loterj (RJ), Lottopar (PR), Lotema (MA), Lototins (TO), LEMG (MG) and Lotep (PB). Other states that are in the process of implementing their own lotteries may also benefit from this migration.
It is worth ing that the states have legal autonomy to grant licenses at the local level and with a fixed grant fee in the range of R$5.5 million and a variable fee of 5% on the GGR, much lower than federal licenses.
With this, all expectations of compensating for the loss of revenue with the IOF will not be configured with the increase in the tax for bets regulated and licensed by the federal government. “The Provisional Measure is a shot in the foot for the government, which will lose billions in revenue and in new grants, which should not be requested,” guarantees another lawyer in the sector.
"The increase in taxes on the betting sector as a way of compensating for the review of the IOF taxation not only directly affects sports betting operators — with the increase in GGR from 12% to 18% — but also has a cascading effect, as the fintech sector was also impacted by the increase in CSLL (Social Contribution on Net Income),” highlights César Garcia, CEO of OneKey Payments.
“This change eliminated the first tax bracket of 9%, determining single brackets of 15% or 20% on profit, making the main financial sector that historically s the regulated sports betting sector more expensive and less competitive compared to the illegal market, which remains unregulated, carrying out predatory marketing to consumers, without any observance of responsible gaming,” he concludes.
Source: GMB
