Randolfe defends higher taxation for betting and says Congress will need to justify any potential opposition.

The government leader in Congress, Randolfe Rodrigues, defended raising taxes on online betting platforms (bets) in Brazil during an interview with GloboNews this Friday (31). The senator compared Brazilian rates with international ones and stated that the National Congress will need to justify any opposition to increasing taxes on the sector.

According to Randolfe, the current 12,5% ​​tax on online betting in Brazil is considerably lower than that practiced internationally. In New York, for example, the rate reaches 52%, while the European average exceeds 20%. In Africa, countries like Kenya apply rates between 18% and 19%.

It should be clarified that, contrary to what was reported by the government leader in the National Congress, the taxation of sports betting and online gaming companies in Brazil is 12%, not 12,5%. Furthermore, betting companies in Brazil are also subject to Corporate Income Tax (IRPJ), Social Contribution on Net Profit (CSLL), Social Integration Program (PIS), Contribution to Social Security Financing (Cofins), and ISS (Service Tax). With the introduction of the Selective Tax or CBS/IBS, which has a projected rate of 28%, the total taxation could reach 45,4%.

The legislator highlighted that the issue goes beyond revenue collection and also involves the need for more effective regulation. Projections indicate that betting should generate between R$ 1,5 billion and R$ 2 billion for Brazilian public coffers.

"The government will insist on the line that betting and banks need to be taxed," declared the senator, confirming that President Luiz Inácio Lula da Silva has ordered the resumption of discussions on increasing taxation not only on betting, but also on fintechs.

Randolfe recalled that during the previous administration, betting platforms operated without any taxation in the country. The senator expressed concern about the impact of online betting on the most vulnerable families, characterizing the phenomenon as a problem that mainly affects the low-income population.

In his assessment, there are types of betting for which regulation would be insufficient, even advocating for prohibition in some cases. For others, he suggests the implementation of selective taxation, similar to that applied to products such as cigarettes and alcoholic beverages.

The government leader questioned the stance of Congress if it does not move forward with the discussion to raise the current tax rate of 12% to between 18% and 20%. This is one of the issues that the government intends to put to a vote, as indicated during the interview.

However, international experience shows that excessive tax increases can have adverse effects. In the Netherlands, the government decided to raise the tax on gross gaming revenue from 30,5% to 34,2% in 2025, and to 37,8% in 2026, but a report commissioned by the Dutch parliament warned that this could cause gamblers to migrate to the illegal market.

The UK is considering increasing the tax rate on sports betting from 15% to 25%, and the tax on remote gambling from 21% to 50%. Research conducted by YouGov indicates that 28% of regular gamblers would migrate to the illegal market if this increase were to occur.

In Sweden, raising the tax rate from 18% to 22% on gross gaming revenue in 2023 resulted in a drop in the country's channeling rate from 92% to 72%, according to estimates by the consultancy H2 Gambling Capital. Meanwhile, Italy, which applies one of the highest tax burdens in Europe (25,5% for casinos, 24,5% for sports and virtual betting, plus an additional 3% tax on gross profit), faces an illegal market estimated at €20 billion annually.

Germany, which adopted a 5,3% tax on wagered volume in 2021, recorded an 18,3% increase in the illegal betting market in 2024. In Colombia, the implementation of a 19% VAT on player deposits led to a 32% drop in operating revenue for operators between March and June of this year, in addition to reducing contributions to the healthcare system from 40 billion to 27 billion pesos starting in March.