Brazil’s highly regulated fixed-odds betting market continues its impressive momentum in its second year of operations. Building on the success of 2025, the sector now includes 83 licensed operators, 29.4 million active users, and R$ 37 billion in public revenue.
Tax Reform Threatens Higher Rates
A recent study by LCA Consultoria, commissioned by the Brazilian Institute of Responsible Gaming (IBJR), indicates that the tax burden on the sector may rise from 32% to 42% by 2033 due to ongoing tax reform.
This projection has raised concerns among stakeholders, especially given the high upfront license fees of R$ 30 million already required to enter the market.
Impact of Rising Taxes on Operators
The proposed tax changes include the replacement of existing levies, such as PIS/Cofins and ISS, with new contributions like IBS (Tax on Goods and Services) and CBS. The social contribution rate on operators’ revenues may also increase from 13% to 15%.
Eric Brasil, director at LCA Consultoria, noted that this could add 14 percentage points above the proposed 28% baseline tax, creating financial pressure on operators.
Stakeholder Concerns Over Regulatory Stability
Plínio Lemos Jorge, president of the National Association of Games and Lotteries (ANJL), emphasized that regulatory stability is critical for market confidence.
“If taxes keep increasing by 1% or 2%, at some point operations will no longer be viable. Companies entered Brazil based on a defined framework; changing the rules mid-game breaks that trust.”
Risk of Driving Users to Illegal Platforms
Increasing taxes may also affect consumers, potentially pushing them toward illegal betting sites as a cheaper alternative.
André Gelfi, director and co-founder of IBJR, highlighted that every 5 percentage points of increased market formalization could generate approximately R$ 1 billion in additional revenue, underscoring the importance of keeping players in the legal market.
The “Sin Tax” Debate
A further concern is the proposed Selective Tax, set for introduction in 2027, which functions as a “sin tax.”
Gelfi explained that this approach misapplies the taxation logic used for state lotteries to fixed-odds betting, which operates with lower profit margins and higher operating costs.
Balancing Revenue Goals with Market Sustainability
As Brazil develops its regulatory and financial framework, the challenge will be to maximize revenue without undermining market sustainability.
Over-taxation could unintentionally benefit illegal operators, reducing compliance and market trust. The coming years will reveal whether Brazil can maintain a competitive, regulated betting market while achieving revenue targets.
