Latin America Focus
these safeguards already in place? A question that was pretty much put to lawmakers by Virgínia Fonseca herself during her testimony. "If it really does so much harm to the population, ban everything. Why are you regulating it?” she said.
TAXATION In June the Executive Power forwarded a Provisional Measure (MP) to the National Congress that increases the tax on betting operators. Te Provisional Measure (MP) 1.303/2025, which includes a raft of other measures, was implemented as a means to compensate for the revocation of a decree by President Luiz Inácio Lula da Silva that aimed to increase the Tax on Financial Transactions (IOF). Te provisional measure increases the tax burden on sports betting,
raising the tax rate on betting companies’ revenues from 12% to 18% Gross Gaming Revenue (GGR). It requires a vote by senators and deputies in order to take effect. Before the decree was published six associations representing the
gambling sector in Brazil expressed their concern arguing that operators could leave the market while the illegal market will expand even further. Indeed, according to the statement many licensed operators “are already considering returning their licenses and ceasing operations in the country.” In addition, Te National Association of Games and Lotteries (ANJL) sent a document to leaders of the National Congress criticising the increase in taxes. Te entity claims that the additional tax could generate billions in revenue losses for the country and also benefit illegal gaming platforms. With the tax hike, the government expects that the increase in
betting taxation will generate a monthly impact of around R$170 million, reaching a maximum of R$680 million. However, according to the ANJL, the measure could represent the loss of R$2.8 billion in revenue for the country. Te document also warns that the “proposal to increase the rate applicable to the GGR occurs at a sensitive time in the process of implementing the new regulatory framework and may increase the likelihood of legal action by companies that are already licensed or have requests under analysis.”
WHAT’S NEXT? When President Lula signed converted Bill PL 3626/2023 into Law 14.790 hopes were high that we were on the threshold of a regulated market which would allow licensed operators to operate on an even playing field. Unfortunately, it is becoming clear that it may well have already been too late by then. Indeed, the legal vacuum that had existed up until that point has led to an often-chaotic situation which are seeing being played out right now with the government playing catch up and struggling to contain the illegal market. At the same time lawmakers are trying to impose new rules on the
industry which could restrict opportunities even further while new scams continue to emerge that harm players and the reputation of the legal industry. With costs of licenses so high and an already heavy tax burden in place, which is only going to become worse, we could well see operators reversing and moving out of the market altogether. Te government will have to somehow move quickly but from what we have seen so far lawmakers are too busy trying to move the goalposts to move quickly enough to prevent this from happening.
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