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The Brazilian Institute for Responsible Gaming (IBJR) released on Thursday (23) in São Paulo an infographic with the possible tax burden that the online betting sector would have to bear if ongoing legislative proposals aimed at raising taxes on Gross Gaming Revenue (GGR) advance in Congress. The GGR, or gross gaming revenue, is the total placed in bets minus prizes paid out to winners, the basic metric used to calculate taxation in regulated gaming markets.
Proposed Bill and Potential Taxation Impact
Among the bills analyzed, Bill 5.076/2025 stands out. It proposes the doubling of the GGR tax rate from 12% to 24%. This amendment recently gained momentum with the approval by the Chamber of Deputies’ Finance and Taxation Committee (CFT) of a request for urgency for its discussion on Wednesday (22).
In addition to the potential increase in GGR taxation, IBJR adds that Brazil’s broader Tax Reform will also exacerbate the fiscal pressure on the sector. The reform introduces two new taxes, the Contribuição sobre Bens e Serviços (CBS) and the Imposto sobre Bens e Serviços (IBS), with a combined rate that has been calculated at 28%. Together with the proposed higher GGR rate, the total effective tax rate for betting consumption could be 45.4%.
Concerns About Competitiveness and Illegal Markets
The IBJR report highlights that this trajectory runs contrary to best international practice, where sensible taxation helped transition illegal betting markets into the regulated sphere. In those jurisdictions where tax levels were maintained at competitive rates, regulated operators could more effectively compete with offshore or unlicensed sites, leading to higher long-term tax receipts and better consumer protection.
According to Federal Revenue Service data cited by the IBJR, legal sites in Brazil have already produced R$6.85 billion in tax revenues as of September 2025. However, the illegal market, which accounts for an estimated 51% of all betting, translates to the government losing R$10.8 billion in revenue annually.
Data-Driven Recommendations for Policy
The institute also quotes a study by LCA Economic Consulting in partnership with Instituto Locomotiva, which concluded that “for every five percentage points of market formalization, Brazil could collect approximately R$1 billion in additional tax revenue.” The study contends that the government’s priority should be to reduce the size of the illegal market, rather than overburdening companies that are already legal and operating under regulatory oversight.
The IBJR also pointed to international case studies demonstrating the risks of over-taxation. In the Netherlands, a recent tax increase on betting led to a €200 million drop in tax revenue, as operators and consumers shifted to unregulated options. In Italy, stringent advertising prohibitions contributed to the growth of illegal gambling operations, working against the same policy objectives of regulation.
A Call for Balanced Regulation
In releasing this information, the IBJR reaffirms its commitment to transparency and fact-driven discourse in the ongoing discussion around Brazil’s online betting framework. The association reaffirms that a sensible tax model, one that fosters compliance, competitiveness, and responsible gaming, is essential for the long-term sustainability of the industry.
The infographic’s publication comes at a vital time, as Brazil’s betting sector is in the midst of being officially regulated and adapting to evolving legal and tax demands. The IBJR calls for open discussions between policymakers, regulators, and industry stakeholders so that Brazil’s gaming tax strategy encourages growth alongside fairness, rather than driving operators and players back into the shadows of illegality.
Source: BNL Data
