The Brazilian government is considering increasing the tax on gross gaming revenue (GGR) from sports betting from 12% to 18%.
This measure aims to offset the loss of revenue from the Financial Operations Tax (IOF).
Industry associations are opposing the increase, arguing it could destabilize contracts and drive businesses to unlicensed platforms.
According to the National Association of Games and Lotteries (ANJL), the change in taxation jeopardizes the balance of contracts signed under the 12% rate.
The Brazilian Institute of Responsible Gaming (IBJR) considers the measure unacceptable and warns it could make it impossible for many companies to operate.
The IBJR estimates that the illegal market could grow from 50% to at least 60% due to the tax increase.
The sector argues that the proposal, in addition to not solving the government's structural collection problem, may have a reverse effect by encouraging the use of unlicensed platforms.
The regulated online betting market moved around R$3.1 billion monthly in the first quarter of 2025, while the clandestine market operated with estimates between R$6.5 billion and R$7 billion monthly.
The measure is seen as potentially undermining the goals of the regulatory framework, which include ensuring revenue collection, protecting consumers, and promoting system integrity.