The Brazilian Responsible Gambling Association (IBJR) warned this week at Senate and House hearings that simply raising taxes on gambling companies will not solve the national deficit issue, but may instead drive gamblers towards the underground market. IBJR emphasized that the government should focus on combating illegal gambling and maintaining sports integrity, rather than increasing the tax burden on legal operators.
At the joint Senate committee hearing, IBJR Chairman Fernando Vieira pointed out that the illegal market currently accounts for more than half of Brazil's total gambling volume, generating about 40 billion reais ($7.86 billion) in revenue annually. He stated that for every 5 percentage points of regularization in the gambling market, it could bring about an additional 1 billion reais ($184 million) in revenue for the country, thus the most effective method is to combat illegal gambling.
Vieira also emphasized that the current tax burden on legal gambling is already as high as 28%, and it could exceed 40% after future tax reforms, along with selective taxes and corporate income tax. This high tax burden could jeopardize the survival of legal operators and foster the black market. He warned, "People will not stop gambling, but in the underground market, there are no rules, no audits, no protection, and all the risks fall on the consumers."
Meanwhile, at the House hearing, IBJR Director and Advisor André Gelfi emphasized the importance of sports integrity. He pointed out that restricting betting methods cannot effectively curb match-fixing, "Without healthy sports, there is no gambling industry. International experience shows that restricting gambling on sports events does not combat illegal activities."
IBJR calls on regulatory authorities to prioritize combating illegal betting as their primary task, by strengthening the regular market to protect gamblers' rights while maintaining fairness and justice in sports. Through this intervention, the association hopes to encourage policymakers to focus on the development and regulation of legal gambling, rather than simply relying on raising taxes.
