Brazil is experiencing a historic moment: after years of waiting, we finally have a regulated market for sports betting and online gambling. The enactment of Law No 14,790/2023 has unlocked a long-stalled agenda — and for that, the current government deserves recognition. While the primary driver was revenue generation, the industry has welcomed regulation with maturity, seeing it as a collective achievement.
But regulation is, above all, about protection. Protecting the market, the government, the consumer. When regulation becomes merely a tool for excessive taxation, without clear trade-offs, it ceases to be regulation. It becomes suffocation.
The increase in the rate from 12 % to 18 % on GGR — already regarded as inevitable by many experts — represents exactly that: a dangerous shift from regulatory policy to confiscatory policy. A risky gamble that could kill the legal market before it has even matured.
Much is said about the impact on B2C operators, and it is severe. Companies paid BRL 30 million for licences and invested in infrastructure, marketing, technology, employment and training. According to IBJR, over BRL 2.3 billion was raised in licence fees by early 2025. This planning was based on the prevailing 12 % rate. Any sudden change jeopardises the financial balance of contract agreements, violates the principle of legitimate expectation, and paves the way for legal challenges.
But the impact goes beyond that. B2B companies—game providers, platforms, anti–fraud systems and payment services—entered contracts under the same tax assumptions. Raising the burden threatens the entire ecosystem and discourages new entrants — at a time when the country should be attracting innovation, not repelling it.
Tax, yes. Confiscate, no.
A legally registered betting operator in Brazil already pays standard taxes: corporate income tax, PIS, COFINS, ISS or ICMS. An additional levy specific to their activity would only be justified if there was direct feedback to regulation — such as funding for oversight, combating the illegal market, or serious responsible gambling initiatives. Again, protecting the government, market and player.
Nevertheless, the industry swallowed the so-called “sin tax”, as some legislators call it—revealing misinformation and a moralistic narrative bent on demonising a legitimised, licensed and economically relevant activity. Now considering raising it from 12 % to 18 %, with untargeted use and without sector consultation, is disproportionate.
According to ANJL, the illegal betting market accounts for around 60 % of the volume operating in Brazil. In the first quarter of 2025, the regulated market handled approximately BRL 3.1 billion per month, while the illegal market circulated between BRL 6.5 and 7 billion monthly. In other words, the real focus should be on combating this uncontrolled sector—not strangling those operating legally.
iGaming: Yes to regulation. No to confiscation.
From farm gate to guarded gate
Before the law was approved, lawyer Luiz Felipe Maia likened the Brazilian gambling scene to a farm gate with padlocks—but wide-open sides. Today, the situation and the metaphor are different.
The regulated market is now like an apartment block with a security gate: the first entry point seems simple—a button, a code, facial recognition. But then comes the second gate. And it won’t open. The system demands a password, then locks again, then demands verification. Meanwhile, those who entered from the back are already making a splash in the communal pool. A condo you helped build, paying property tax, maintenance, security—but still can’t enjoy.
There is broad consensus that raising the tax burden will push businesses and consumers toward the unlicensed market, where there is no oversight, no player protection, and no accountability. It’s worth noting that many criticised practices—such as the indiscriminate use of influencers, lack of certification, or fraudulent game clones—are precisely common in that shadow zone.
Course correction towards a promising path
Brazil has come a long way to reach this point. The regulation of iGaming, even though driven by revenue motives, marked institutional progress. It brought (mostly) clear rules, attracted serious operators, and drew investors who recognise Brazil’s potential as a major destination for both B2C and B2B market players.
No system, however well intentioned, is immune to improvement. The guarded gate analogy—where the legal operator enters through controlled access yet is held back by obstacles while the illegal market roams freely—is illustrative, but not absolute.
The solution is not to abandon the initiative—it is to refine it. We are not calling to weaken regulation, but to establish fiscal balance that preserves competitiveness, encourages innovation, and rewards legally compliant operators.
Brazil has already earned international respect with its regulatory model — now it has a chance to cement it with responsibility, transparency, and dialogue.
The industry is not asking for privilege. It is asking for predictability. For coherence. And above all, it believes in the project of a regulated market that is truly sustainable — for the State, for operators and for the investors who have placed and continue to place their bets on Brazil with seriousness.
(*) Eliane Nunes, Chief Growth Officer, Salsa Technology
