Since the enactment of Law No. 14,790/2023, the sector has demonstrated its commitment to legality and the country’s economic development.
Currently, licensed operators already face a significantly burdensome tax structure, which includes: taxation of up to 26% on gross gaming revenue (12% Gaming Tax + 9.25% PIS/COFINS and up to 5% ISS); in addition to a 34% tax on net profit (25% Corporate Income Tax - IRPJ + 9% Social Contribution on Net Profit - CSLL). On top of that, operators are subject to monthly regulatory fees that can reach approximately R$ 2 million (US$350,000) per operator.
With the ongoing transition to the new tax framework, the replacement of PIS/Cofins and ISS by CBS and IBS is expected to increase the tax burden by an additional 13% on gross revenue, further raising an already extremely high tax load — one of the highest in the world for this industry.
We must also consider the recent approval of a Selective Tax on the sector, the rate of which is still pending legislative definition, but which brings the industry’s overall tax burden close to 50%. This casts serious doubt on the economic viability of a regulated online gaming market in Brazil.
It is important to highlight that the sector currently has 79 authorized operators, who have invested over R$ 2.4 billion (US$420m) in licensing fees just to begin operations in Brazil. The expected tax and social contributions for 2025 exceed R$ 4 billion (US$700m), destined for strategic areas such as Sports, Health, Public Safety, Tourism, Education, and Social Security.
Moreover, these companies operate under strict regulatory, technical, and compliance oversight, fully meeting the requirements of the Secretariat of Prizes and Betting of the Ministry of Finance (SPA/MF), including rules for anti-money laundering, match-fixing prevention, responsible gaming, and technological requirements.
In this context, the imposition of new tax burdens on an already heavily taxed sector is unjustifiable — from any technical, economic, or public policy standpoint — and risks rendering the activity unfeasible. Measures that compromise legal operations are likely to backfire: strengthening illegal platforms that do not pay taxes, do not follow regulations, and expose consumers to fraud, gambling addiction, and other vulnerabilities, as seen in recent decades.
International experiences, such as those of Italy and Spain, have shown that excessive taxation in newly regulated markets leads to the expansion of the illegal market, resulting in revenue loss and reduced regulatory effectiveness. In Brazil, this risk is already evident: while the regulated market moved around R$ 3.1 billion (US$542m) per month in the first quarter of 2025, the illegal market operated with estimated volumes between R$ 6.5 billion (US$1.14bn) and R$ 7 billion (US$1.22bn) per month — figures that are entirely outside the State’s control.
Increasing the tax burden on licensed operators thus directly threatens their continued presence in the Brazilian market — many of whom are already considering returning their licenses and ceasing operations in the country. This exit would boost the competitiveness of illegal operators, undermining the core purposes of the regulatory framework: securing revenue, protecting consumers, and promoting system integrity.
It is also important to emphasize that licenses were acquired based on clear regulatory and economic assumptions, which formed the foundation for business models and investment decisions. Disrupting these assumptions may result in litigation and systemic impacts, deterring investment and creating instability in the consolidation of the regulated market — thereby jeopardizing regulatory predictability and endangering established commitments.
In light of this scenario, the signatory entities reaffirm their willingness for institutional dialogue, but strongly reject any attempt to scapegoat the regulated betting sector as a solution to the country’s fiscal imbalance.
Measures to rebalance public accounts must be built on structural and sustainable reforms, such as reducing unproductive expenditures, efficiently allocating collected revenues, regulating currently informal sectors, expanding the formalization of the digital economy, and conducting regulatory impact assessments before imposing new tax obligations.
It is crucial to reaffirm that efficient taxation is not to be confused with confiscation. Attempting to offset short-term fiscal losses by disproportionately increasing the burden on a sector still in the midst of regulatory consolidation undermines the very goal of public policy: to channel consumers into a safe, legal, regulated, and socially responsible environment.
Brazil now has a historic opportunity to consolidate a mature regulatory model for betting, with high revenue potential, a commitment to market integrity, and strong consumer protection. It is essential to avoid irreversible setbacks.
Brazilian Association of Gaming and Lotteries (ABRAJOGO)
Association of Bets and Fantasy Sports (ABFS)
International Gaming Association (AIGAMING)
National Association of Gaming and Lotteries (ANJL)
Brazilian Institute for Responsible Gaming (IBJR)
Brazilian Legal Gaming Institute (IJL)
