After raising taxes on the betting sector, the Netherlands has seen growth in the illegal betting market; experts fear the phenomenon will be repeated in Brazil.

The increased tax burden on the betting sector in Brazil is causing concern among legalized companies and industry experts, who fear the growth of the illegal market. Representatives of the sector cite the case of the Netherlands, which, after increasing the tax rate to 34,2%, saw the illegal market emerge by more than 57%, according to a survey by the KSA, the Dutch gambling regulatory authority.

Experts point out that increased taxation raises the operating costs of legitimate companies, resulting in lower winnings for bettors and more limited deposits. As a result, illegal platforms, which do not pay taxes and operate without security, appear as a more attractive option because they offer higher winnings and do not apply deductions.

Data from the KSA shows that the share of revenue derived from licensed companies fell from 51% to 49% at the beginning of 2025. For the first time since 2021, the year the online betting market was legalized in the Netherlands, a 16% drop in gross gambling revenue was recorded in the European country. These figures are attributed to the rise of unregulated platforms, as a consequence of increased taxes and stricter limits controlling the behavior of bettors.

In Brazil, the illegal betting market already represents 51% of the sector, according to a study by LCA Consultores, and with the recent increase in taxes for betting sites, the trend is for illegal systems to continue growing. This phenomenon is extremely detrimental to regulated betting sites, which would have to face competition that does not meet the same financial obligations, in addition to losing customers and risks to the sector's reputation.

Executives from Brazilian companies that have adhered to the sector's regulations comment on the importance of Law No. 14.790/2023, which contributed to the maturation and development of a safer market for everyone involved in the betting industry.

“The unregulated market reduces the country's revenue and exposes consumers to fraud due to the absence of responsible gambling mechanisms. It is important to have strict oversight of the illegal sector and great care in raising taxes, as this contributes to strengthening the irregular sector and harms companies that have followed the correct path,” says Roberto Regianini, EVP of Reals.

Furthermore, experts point out that the social and economic harm caused by illegal betting is immeasurable for the country. The ease of access to the illegal market puts bettors in a vulnerable situation, since illicit companies take advantage of the government's difficulty in monitoring the market.

Without adequate government oversight, the illegal market thrives, allowing minors to gamble, failing to provide tools to combat addiction, and not contributing to the national economy since it does not pay taxes.

“It is important to emphasize that the undue growth of the illegal betting market, driven by decisions as impulsive as the problems they supposedly aim to combat, affects not only betting houses that operate in accordance with regulations, but the whole of society. Daily, we see how an illegal bet causes irreparable damage to the mental health of bettors, who believe they are following the easiest and most unsupervised path and consequently are affected by scams and suffer significant financial losses,” concludes Cristiano Costa, Chief Knowledge Officer (CKO) of EBAC.