Brazil’s regulated betting market is barely a year old, but it is already facing one of its biggest long-term threats a rising tax burden that could nearly double within a decade if the country’s broader tax reform plays out as planned.
A study by LCA Consultoria, commissioned by the Brazilian Institute of Responsible Gaming, has found that the total tax burden on licensed betting operators is projected to climb from 32% in 2025 to 42% by 2033. The increase is not the result of a single policy decision but rather the cumulative effect of Brazil’s sweeping tax reform, which is being phased in over several years and will eventually replace a patchwork of federal, state and municipal levies with a new dual VAT-style framework.
The numbers inside the report are even more striking when broken down by product type. Under a baseline rate scenario, sports betting could face an effective tax burden of around 38.5%, while casino-style gaming could be looking at 44.5%. These are not fringe projections they reflect what happens when Brazil’s full reform timeline is applied to an industry that already carries one of the heaviest tax loads in the country.
To understand how the sector got here, it helps to look at what has already happened. Brazil’s GGR tax started at 12% when the regulated market launched in January 2025. It was then raised to 18% from October 2025, a 50% increase that caught much of the industry off guard. Social allocations applied to betting revenue are also set to rise gradually from 12% to 15% by 2028. On top of this, the country’s ongoing tax reform is set to replace key federal contributions in 2027 and complete the transition to a new state and municipal tax structure by 2033.
The industry has been vocal about where all of this leads. When you make it more expensive to operate legally, you hand an advantage to those who operate illegally. Brazil’s black market remains a significant problem estimates suggest that illegal operators still account for more than half of total betting activity in the country. Every tax increase on licensed operators risks widening that gap further, pushing more bettors toward unregulated platforms that offer no consumer protections whatsoever.
The comparison with other markets adds further weight to the industry’s concerns. Brazil’s effective federal tax rate on betting operators already sits at around 27%, compared with roughly 15% for technology companies and about 4% for telecoms firms. The disparity raises a legitimate question about whether betting is being singled out as an easy revenue target rather than being treated as a sustainable regulated industry.
The government’s position has so far been driven by fiscal pressure. With elections on the horizon and significant welfare commitments to fund, betting has become one of the sectors expected to contribute more to the national treasury. The federal government collected nearly BRL 10 billion in taxes from betting companies in 2025 alone, the first year of the regulated market, with total industry contributions estimated above BRL 10.7 billion when including payments not directly handled by the Federal Revenue Service.
Industry voices argue that the smarter path to higher revenue is not through higher tax rates, but through stronger enforcement against the illegal market. Bring more activity into the regulated system, the argument goes, and the government collects more without driving licensed operators to the edge. The regulated market generated BRL 37 billion in revenue during 2025, a figure that could grow significantly if the black market is properly tackled.
For now, the federal government has not indicated any intention to adjust policy in response to industry concerns about the long-term tax trajectory. That leaves operators navigating a market that is growing fast but becoming increasingly costly to participate in legally a tension that Brazil will need to resolve if it wants its regulated betting industry to thrive well into the next decade.
