The Brazilian Institute of Responsible Gaming (IBJR) argues against raising taxes on sports betting, stating that it would create an “unsustainable” scenario.
Speaking at a public hearing at the Senate Joint Committee, the executive president of the IBJR, Fernando Vieira, has spoken out against a provisional measure that would increase taxes on sports betting. He and the IBJR said that such a measure could “destroy a recently regulated market and push millions of bettors into illegality”.
“There’s a perception that the betting sector can pay Brazil’s bills alone. This is unrealistic,” he said. “The combined revenue of the five largest Brazilian companies is almost 50 times greater than the entire revenue of the licensed betting market. This is disproportionate and a complete breach of trust in the regulator, given that the market was regulated only eight months ago.”
Vieira went on to refute the claims that betting companies only pay 12% in taxes, claiming that with all consumption taxes, companies often pay as much as 28% with the Provisional Measure and more than 40% with the tax reform.
“This scenario is unsustainable,” he added. “On the contrary: it undermines legal operators and strengthens the underground market.”
Instead of taxes, focus on illegal markets
Instead, Vieira said that the administration should focus on tackling illegal gambling, rather than focusing on those companies already adhering to regulations and paying taxes legally. As it stands, the underground market already represents up to 51% of gambling in Brazil.
“The most efficient way to increase revenue is to combat illegal gambling, not to stifle those who are regulated and paying taxes,” argued Vieira. “People won’t stop gambling, but in the underground sector, there are no rules, no audits, no protection. Externalities increase, and the consumer is the one who loses.
“Our appeal is clear: the solution lies in combating illegality, consolidating the regulated market, collecting revenue efficiently, and protecting gamblers.”
Featured image: IBJR
