Taxation under scrutiny: What changes with the new tax hike on betting?
The debate over taxation in Brazil’s sports betting market has once again taken centre stage — and rightly so. Amid the federal government’s ongoing effort to boost tax revenue, this newly regulated sector now faces a fiscal escalation that threatens to destabilise the delicate balance between legality and economic feasibility.
During BiS SiGMA South America 2025, held in April at the Transamerica Expo Center in São Paulo, one of the event’s most legally dense panels gathered industry experts to examine how tax burdens impact betting operators in Brazil. Moderated by Ana Helena Pamplona, partner at HP Advocacia, the discussion issued a clear warning: Brazil risks suffocating the legal industry before it even has a chance to take root.
Just a few weeks later, that warning became reality. The government announced a tax hike from 12% to 18% on operators’ net revenue — a 50% increase that sent shockwaves through the industry.
To unpack the implications of this decision, we invited Ana Helena for an exclusive interview — a continuation of the analysis that began on the BiS SiGMA stage. What follows is a critical and realistic look at the risks posed by current fiscal policy, the regulatory mismatch, and the fine line between encouraging legality and fuelling the underground market.
Ana, when you moderated the tax panel at BiS SiGMA, there was already widespread concern over a potential tax hike. How do you interpret what has — or hasn’t — changed in the government’s stance since then?
Since moderating the panel at BiS SiGMA, what hasn’t changed is the government’s clear and ongoing need for revenue. That need is always present and, in light of it, any sector that appears viable and politically expendable may become a target for increased taxation.
What remains uncertain is whether the government truly understands that excessive taxation could seriously undermine the migration to the legal market. If the costs of operating within the law become too high, the risk is that operators will be pushed away from the regulated environment — the exact opposite of what regulation aims to achieve.
The increase in tax burden came without proportional expansion in regulatory measures — especially regarding enforcement, combating illegality, and legal certainty. In your view, what risks does this imbalance pose to the business environment in Brazil?
This imbalance poses serious risks to the business environment. Increasing the tax burden without a proportional boost in regulatory measures — such as effective enforcement, genuine efforts to tackle illegality, and minimum guarantees of legal certainty — can make the regulated market unattractive and economically unviable for many operators.
The danger is creating a scenario where much is demanded, but little is provided in terms of structure and stability. This discourages investment, hinders predictability, and may end up strengthening the very illegal market the law seeks to eliminate. Instead of consolidating a robust regulated sector, this imbalance can erode trust and drive away serious, committed players.
In the panel, you discussed the absence of a tiered tax model that considers a company’s size and maturity. Is this path still viable, or has it been buried under current fiscal policy?
Any forecast on this issue, in Brazil, remains mere speculation — especially given the clear misalignment between Congress and the Executive. The absence of a tiered tax model remains a significant gap, but while there is no meaningful alignment between branches of government, it’s hard to say whether this agenda is still viable or has already been practically dismissed by current fiscal policy. The scenario remains unstable, with no clear signs of progress in this regard.
One issue that has gone largely unnoticed in public discourse is that the tax increase only affects legal operators, while the illegal market continues to operate largely unchecked. What does this say about the government’s priorities today?
This highlights a clear priority for immediate revenue, even at the expense of effectively consolidating the regulated market. By focusing tax hikes on legal operators, without corresponding efforts to combat the illegal market, the government signals that regulation is still not being treated as a structural public policy — but rather as a short-term revenue opportunity.
This undermines competitive fairness and weakens the core goal of legalisation, which is to bring operators and bettors into a safe, regulated environment.
From a legal standpoint, is there room to challenge the new tax rate? Or is the sector now forced into a purely adaptive approach — a “just accept it” attitude?
There is always legal room for challenge — the right to contest is inherent in a democratic state. However, the strength of these arguments in a broader social context where the sector faces public scepticism is another matter. The lack of popular and political support makes it difficult for even well-founded legal challenges to succeed.
As a result, many have adopted a more adaptive stance, in the spirit of “just accept it”. But that doesn’t mean I personally agree with this posture, or see it as the smartest one. It’s important to assess whether abandoning legal and institutional debate may carry a heavy price for the sector in the medium and long term.
If the legal industry is suffocated by taxation while the illegal market thrives in the shadows, who’s washing their hands — the regulator, Congress, or the government itself? Can anyone be held responsible for this scenario?
Ethically and realistically, it’s not possible to single out one party as responsible for such a complex scenario. When a failure of this magnitude occurs, it results from a combination of factors and decisions — or omissions — by multiple actors.
The regulator, Congress, and the government all play a role in this process, whether in drafting rules, shaping public policy, or overseeing their implementation. When the legal industry is stifled while the illegal market flourishes, the problem doesn’t lie with a single institution, but rather in the lack of alignment, prioritisation, and collective responsibility needed to build a truly functional regulated environment.
Since this interview was recorded, Brazil’s taxation scenario remains on high alert. The tax hike was passed in Congress as part of a broader fiscal package, with no clear advancements in enforcement, incentives for formalisation, or tangible efforts to curb the illegal market.
Within the industry, the prevailing sentiment is one of frustration and resistance. Operators are exploring legal alternatives, while trade associations are intensifying institutional dialogue in an attempt to prevent further tax increases from being imposed without technical debate. Legal uncertainty continues to be one of the greatest obstacles to consolidating the regulated market, and the risk of capital flight to jurisdictions with more flexible frameworks remains on the radar.
BiS SiGMA South America 2026, soon to be officially announced with full agenda, venue, and date, is already shaping up to be the next major stage for this debate. Expectations are high that the event will once again bring together key industry players, regulators, and policymakers to seek more realistic and sustainable regulatory paths for the Brazilian market.
After all, as Ana Helena aptly warns: taxing without structuring is a recipe for regression.
