The Brazilian Institute of Responsible Gaming (IBJR) has strongly criticized a proposed increase in the country’s sports betting tax, warning it could substantially boost illegal gambling activities and reduce public revenues by billions.
Brazil’s Minister of Finance, Fernando Haddad, announced the potential of a hefty tax hike from 12% to 18% during a recent press conference, positioning it as an alternative to increasing the Financial Transactions Tax (IOF), which was previously dismissed by government officials.
According to the IBJR, if the tax rate hike goes ahead, Brazil’s regulated sports betting market would suffer significantly, helping illegal betting operators to unfortunately take even more custom, potentially capturing over 60% of all gambling activity.
If this happens, it could end up costing the government around BRL2 billion (£266.7 million) annually in lost revenue if BNLData is correct, severely impacting Brazil’s broader economic recovery.
“The right path to increasing revenue is not to penalise those who operate legally, but rather to strictly combat illegality and protect bettors by following sector regulations,” the IBJR emphasized in an official statement on LinkedIn.
Moreover, the IBJR warned the tax increase could discourage legitimate international and domestic gaming companies from investing further in Brazil’s regulated gambling market, almost creating a climate of legal uncertainty and undermining consumer protections.
Highlighting its ongoing commitment to responsible gaming and transparent market practices, the IBJR reiterated its intention to continue dialogue with the Brazilian government and the National Congress. Nevertheless, it affirmed readiness to pursue legal avenues if necessary to safeguard the integrity and viability of Brazil’s regulated betting industry.
Just last week, IBJR and other industry associations jointly issued a statement rejecting efforts by the government to unfairly target the betting sector as a scapegoat for fiscal challenges faced by the country, urging authorities instead to enhance regulatory enforcement against illegal gambling operators.
