However, international experience shows that sharply increasing the tax burden on a newly regulated sector raises operating costs, reduces the competitiveness of companies that comply with the law, and simultaneously strengthens illegal betting operators, who pay no taxes and already account for more than half of the total betting volume in Brazil. This happened in countries that adopted similar models, such as Germany, Portugal, and Colombia.
At a moment when Brazil is united in efforts to financially weaken organized crime, a measure like this proves particularly counterproductive. Rather than contributing to the fight against illegal activities, the proposal tends to expand them: by penalizing those who operate legally, it creates space for the informal sector — a fertile environment for money laundering — to grow even further.
More mature markets, such as the United Kingdom and Spain, tax what is known as GGR (Gross Gaming Revenue), which corresponds to the amount wagered minus the prizes paid out, reflecting the true taxable capacity of the sector. This is the model currently in effect in Brazil, within a modern regulatory framework that has been in force for less than a year.
In Brazil, only 49% of the market is composed of regulated operators, which pay a 12% tax on GGR — a rate that already constitutes selective taxation.
In addition, they pay PIS, Cofins, ISS, IRPJ, CSLL, and various other fees, resulting in a total tax burden already at a high level, estimated at above 35% when combining taxes on consumption and income.
In 2025, it is estimated that duly legalized betting operators will collect R$ 9 billion (US$1.7bn) in federal taxes, plus R$ 600 million (US$113m) in municipal taxes — essential resources for healthcare, education, public safety, and other priority areas.
It is important for the Senate to assess the feasibility of the revenue projections currently under discussion in Congress. Lawmakers estimate that Cide-Bets and other measures could generate R$ 30 billion (US$5.65bn) per year in additional tax revenue.
However, the formal market corresponding to those 49% is estimated at approximately R$ 36 billion (US$6.8bn), based on official numbers from the first half of the year released by the Secretariat of Prizes and Betting.
In other words, the proposal aims to collect in taxes an amount almost equivalent to the entire revenue of the regulated market — a scenario that is not feasible without compromising the economic sustainability of the legal activity and further expanding the space for illegal betting.
Source: GMB
