Brazilian Gaming Institute warns new tax hike could undermine regulated betting market

The Brazilian Institute of Responsible Gaming (IBJR) has strongly opposed the government’s latest proposal to increase taxation on the country’s regulated online betting sector, warning that the measure could destabilize the industry, reduce public revenue, and expand the illegal market.

In a statement published on its official website, the IBJR described the tax hike as "unacceptable" and said it jeopardizes the viability of companies that have already invested heavily under the current regulatory framework. The group represents a wide cross-section of the legal betting industry, including licensed operators, payment providers, and technology suppliers.

According to the institute, the financial foundations of the sector were built on the existing tax structure, which includes a 12% gross gaming revenue (GGR) rate. “The measure is unacceptable and makes the operation of many companies that have trusted and invested in the regulated market unviable, creates legal uncertainty and threatens public revenue,” the IBJR said.

At the beginning of 2025, each licensed operator paid R$ 30 million (US$5.4 million) for a five-year license, generating more than R$ 2.3 billion (US$413 million) in revenue for the government. The IBJR argues that any mid-contract changes to taxation undermine investor confidence and the economic equilibrium upon which companies structured their entry into Brazil’s regulated betting space.

The organization has indicated it is still seeking dialogue with government officials and members of the National Congress, but noted that it may consider legal action if the proposed tax changes are implemented.

Rather than increasing public revenue, the institute argues that a higher tax burden on legal betting could produce the opposite effect. It warns that the share of gambling taking place outside the legal system, currently estimated at 50%, could climb to 60% or more, resulting in an estimated loss of over R$ 2 billion (US$360 million) annually in public revenue.

Founded to drive responsible gambling in Brazil, the IBJR brings together some of the most prominent names in the global betting and gaming industry, including bet365, BetMGM, Betsson Group, Flutter Entertainment, and Entain. Its associated partners include fintechs and service providers such as OKTO, Pay4Fun, and GeoComply.

Industry stakeholders had already expressed concern over the proposed changes, warning of potential consequences such as reduced investment, fewer license applications, and a shift of users toward unregulated platforms.