IBJR Speaks Out against Brazil’s New Sports Betting Tax Proposal

Brazil’s provisional measure No-1182 lays the groundwork for a nationally regulated betting market. However, the planned tax increase of 18% for licensed operators caused significant concern. The IBJR argues that such harsh measures would place unsustainable burdens on law-abiding operators, driving consumers to unregulated and dangerous alternatives. 

Unsustainable Taxes Can Hurt the Regulated Market

The IBJR is Brazil’s premiere organization committed to promoting responsible gambling practices and advocating for a balanced and fair regulatory environment. The authority has been a staunch proponent of the country’s decision to legalize its sports betting market, giving players safe wagering options. However, the organization has repeatedly criticized the shortcomings of Brazil’s upcoming legislation, outlining lawmaker oversights.

Most recently, the proposed 18% tax hike elicited more harsh criticism. The Institute argues that such a significant increase could hinder Brazil’s nascent sports betting industry, hampering its growth and competitiveness with gray market operators. Such a tax burden could cause reduced investments in technology, marketing, and customer support, hurting the regulated sector.

This burden concerns all companies in the segment… as it will impact the entire economic chain derived from the sports betting sector.

Andre Gelfi, IBJR president

According to the Institute, a higher tax burden on licensed operators could increase betting odds and reduce payout rates for players. Such measures would prompt bettors to seek more attractive alternatives in the gray market, where they face almost non-existent protections from fraud or problem gambling.

Brazil Has Achieved Substantial Progress

The IBJR emphasizes that the government should prioritize responsible gambling initiatives and player protection measures instead of imposing burdensome tax rates. By fostering a safe and transparent gambling environment, Brazil can cultivate a thriving and sustainable sports betting industry while safeguarding its citizens from potential harm associated with excessive gambling.

Brasil’s new legislation delivers on that regard, giving regulators and authorities the necessary tools to tackle match-fixing and illegal gambling. The updated regulations also explicitly prohibit people under 18 and other vulnerable groups from wagering, protecting them from unsustainable financial losses. The IBJR’s in-depth familiarity with Brazil’s ongoing gambling challenges and the state of its sports betting sector makes its advice invaluable in creating effective regulations.

While President Lula da Silva’s provisional measure aims to establish a comprehensive regulatory framework for sports betting in Brazil, it is evident that the proposed tax increase requires further consideration and revision. Ensuring the development of a robust and responsible gambling industry requires policymakers to engage in dialogue with industry experts, operators, and responsible gaming advocates, seeking a middle ground that fosters growth and safeguards consumers.