IBJR warns that new taxation on betting could strengthen the illegal market in Brazil.
The Brazilian Institute for Responsible Gaming (IBJR) warned that the proposed selective taxation “Cide-Bets”, aimed at regulated betting houses, could strengthen the clandestine market instead of discouraging online betting in Brazil. The warning was issued this Saturday (6), in response to discussions about new tax measures for the sector. The entity bases its analysis on international experiences that demonstrate the negative effects of abrupt increases in the tax burden.
The proposal under discussion aims to apply taxes to the total amount wagered as a strategy to discourage online gambling. The IBJR points out that similar cases in Germany, Portugal, and Colombia have resulted in losses for legal companies and benefits for clandestine operations.
Presentation on the risks of CIDE-Bets
Impact on the regulated market
Regulated operators represent 49% of the betting market in Brazil. These companies currently pay 12% on the GGR (Gross Guaranteed Rewards), which is the difference between bets received and prizes paid to players.
Furthermore, legally registered companies collect PIS, Cofins, ISS, IRPJ, and CSLL. The sum of these taxes on consumption and income constitutes an estimated tax burden exceeding 35%, which already characterizes selective taxation on the sector.
Projections for 2025 indicate that legalized betting should contribute R$ 9 billion in federal taxes and R$ 600 million in municipal taxes. These resources are directed to areas such as health, education, and public safety.
The Brazilian Institute of Gambling (IBJR) questions the viability of projections that mention the possibility of generating R$ 30 billion annually in additional tax revenue with the "Cide-Bets" tax and other measures. The institute highlights that the formal betting market in Brazil is estimated at R$ 36 billion, according to data from the first half of the year released by the Secretariat of Prizes and Bets.
This projected revenue represents almost all of the regulated market's turnover, a scenario that could compromise the economic sustainability of legalized operations. The result would be an expansion of the space for illegal betting, at a time when the country is seeking to financially combat organized crime.
The taxation model for GGR (Gross Waste Management), adopted in Brazil, follows practices from markets such as the United Kingdom and Spain, reflecting the sector's ability to pay. This system is part of the regulatory framework implemented in the country less than a year ago.
LCA Consultoria Econômica prepared a report with detailed analyses on the impact of taxation on the betting sector, as indicated by the institute.
