Lawmakers Push for Tax Hike in Brazil’s Gaming Sector, IBJR Warns
URGENT UPDATE: Lawmakers in Brazil are pushing forward with discussions to potentially double the Gross Gaming Revenue (GGR) tax from 12% to 24%, sparking immediate backlash from the Brazilian Institute of Responsible Gaming (IBJR). This proposed tax hike comes just a year after Brazil established a regulated betting landscape, and it could drastically impact the legal gaming sector.
The IBJR warns that this drastic increase would impose a staggering 45.4% rise in tax burden on operators, risking their viability and potentially driving them out of the regulated market. Currently, gaming operators must pay an initial license fee of BRL 30 million (approximately $5.6 million) and a 12% GGR tax, which, combined with other taxes, accounts for nearly a quarter of their revenue.
Experts at the IBJR have voiced serious concerns, arguing that such a tax increase could lead to a reduction in bonuses and player incentives as operators struggle to maintain competitiveness. This scenario could inadvertently bolster the black market, which already accounts for an alarming 51% of online betting activities in Brazil. Recent estimates suggest that Brazilians are wagering BRL 38 billion (around $7 billion) annually with unlicensed operators, resulting in a loss of approximately BRL 10.8 billion (about $2 billion) in public revenue each year.
“Hurting the legal market would unequivocally benefit the black market,”
stated an IBJR representative. They emphasized that even a slight decrease of 5% in legal gaming would result in an additional billion Brazilian reals slipping into the black market, exacerbating the issue.
As discussions continue, the IBJR urges lawmakers to rethink their approach. Instead of imposing higher taxes, they advocate for strategies to enhance the appeal of legal gaming, thereby reducing the financial drain caused by unlicensed operators. The stakes are high, and the implications of this potential tax hike could reshape Brazil’s gaming landscape, impacting both operators and consumers alike.
This is a developing story, and further updates are expected as lawmakers deliberate the implications of the proposed tax hike. Stay tuned for live updates on this urgent matter affecting Brazil’s gaming industry.
