Tax burden on betting will reach 42% by 2033, study says.
The second year of regulation of the Brazilian fixed-odds betting market begins with important advances, with robust figures consolidated throughout 2025: 83 companies authorized to operate, 29,4 million active bettors and R$ 37 billion collected in taxes, according to a report in the Special Supplement published by O Globo, 'Bets: The challenges of the second year of sector regulation'.
For the legalized operators, who paid R$ 30 million in concession fees, the solution for increasing the sector's revenue in the coming years should come from reducing illegal activity, which would also increase consumer protection.
A study conducted by LCA Consultoria at the request of the Brazilian Institute for Responsible Gaming (IBJR) shows that the tax burden on legalized betting will increase by ten percentage points — from 32% to 42% — by 2033, when the transition of the Tax Reform that began to be implemented in January of this year is completed. To reach this conclusion, the researchers took into account all direct and indirect taxes and contributions paid by betting companies (see graph).
The study details the progressive increase in the tax burden on betting companies. Social allocation rates are expected to rise from the current 13% to 15% by 2033.
According to the president of the National Association of Games and Lotteries (ANJL), Plínio Lemos Jorge, the government should not increase it any further than this:
“If the rules of the game don’t change, things can continue like this, because that’s how the companies that came to Brazil were willing to operate. But if they start increasing by 1% to 2% every time, soon there won’t be any viable operation left. Because companies arrive in Brazil based on a premise; changing the rules of the game mid-season would be a breach of trust.”
Eric Brasil, director of LCA Consultoria and one of the coordinators of the study, points out that taxes such as PIS/Cofins and ISS will be replaced by IBS and CBS, which are heavier taxes:
"If we consider the figures from the Ministry of Finance, we will have a base tax rate of 28% for the services and goods sector after the reform. The sector will be 14 points above the average."
Sustainability of revenue collection
A study commissioned by IBJR from LCA in June 2025 reiterates the importance of combating the illegal market, as it shows a direct link to increased tax revenue:
"The study showed that for every 5 percentage points of formalization of the market, the country could collect approximately an additional R$ 1 billion," said André Gelfi, director, advisor, and co-founder of IBJR.
The executive adds that it is also necessary to take into account society as a whole, which benefits from legality and would therefore be impacted if legal companies were to withdraw from the Brazilian market.
“It’s the same with any product: if the tax rate goes too high, it will be passed on to the price, and people will stop buying that product. In our case, it’s a game. And the only option left for the citizen is to go to the black market.”
The director of IBJR is also concerned about the Selective Tax, created by the Tax Reform and scheduled to begin being levied in 2027. This tax, which has been nicknamed the "sin tax," will apply to products considered harmful to health, and the project, which is yet to be regulated, includes betting in this category.
According to Gelfi, the betting market is still relatively unknown because regulation is recent, having started in 2023.
“Our activity was classified as a lottery even though, in essence, it is not. And the lottery works like this: the government collects 100, keeps 60 and distributes 40. Parliamentarians use the lottery money to fund their projects. Due to a lack of understanding, they want to apply the same dynamic to betting.”
