Public Hearing in Congress Recommends Focus on Combating the R$35 Billion Illegal Betting Market

Public Hearing in Congress Recommends Focus on Combating the R$35 Billion Illegal Betting Market

Permanent Subcommittee on Sports Betting Regulation featured presentations, including from IBJR, highlighting how much Brazil loses in revenue due to the illegal market

During a public hearing of the Permanent Subcommittee on Sports Betting Regulation, lawmakers, industry representatives, and authorities emphasized a common point: the country’s main challenge is not the regulated market, but rather the expansion of illegal platforms, which already move around R$35 billion per year without paying taxes, with no integrity rules, and without offering any consumer protection. Wednesday’s session included moments of outrage regarding the Federal Government’s lack of oversight over unregulated sports betting companies operating in the country.

Deputy Caio Vianna (PSD/RJ), president of the Subcommittee, questioned the representative of the Ministry of Finance about the enforcement of the oversight fee established in the regulation, expressing concern upon learning that the fee is currently deposited into a general account together with taxes.

“The Brazilian government today is acting illegally. The law clearly establishes that the oversight fee must be collected with a specific purpose: to combat the illegal market and other irregularities. Yet it is not being used for that—it goes into a general account. Anyone who studies the market understands this is not an oversight fee, it is a tax for the government to use however it pleases, not for the purpose it was created for. That is a serious matter,” stated Caio Vianna.

According to a study presented by the Brazilian Institute of Responsible Gaming (IBJR), illegality costs the country R$10.8 billion annually—an amount that could finance the salaries of up to 184,000 teachers or 94,000 police officers, cover up to 47% of the budget of the Ministry of Justice and Public Security, or fund the construction of more than 40,000 affordable housing units under the Minha Casa, Minha Vida program.

Despite this impact, representatives of the regulated sector criticized the Federal Government’s strategy of raising taxes on licensed companies—which already pay R$2.3 billion in concession fees and bear a tax burden of 21.9%, in addition to social and corporate contributions. Provisional Measure 1.303/25, currently under review in Congress, proposes increasing the tax on gross gaming revenue from 12% to 18%, which, according to the IBJR, will weaken the legal market and expand opportunities for illegal operators.

“While the regulated sector employs people, pays taxes, and protects bettors, the illegal market is free to grow. It makes no sense to penalize those who follow the law while not allocating collected resources to tackle illegality. The world’s leading countries that have successfully regulated nearly all of their betting markets apply tax levels similar to Brazil’s current rates, supported by sound betting policies. If we get it wrong here, we will end up with more illegal bets and lower tax revenue,” said Fernando Vieira, Executive President of IBJR.

The IBJR also warned of the risks of Brazil repeating mistakes made in other countries. The Netherlands, for example, raised betting taxes and saw its revenue drop by €200 million in just one year, while Italy experienced a surge in illegal gambling after imposing severe advertising restrictions.

“This is a turning point. If Brazil manages to shift just five percentage points of the illegal market into the regulated one, additional tax revenue could reach R$1 billion per year. The path forward is not to raise taxes hastily, but instead to invest in enforcement, monitor financial transactions, certify suppliers, and raise consumer awareness. Only then can we reduce the size of illegality and consolidate a strong, sustainable regulated sector,” argued Fernando.

Watch the recording of the hearing here: https://www.youtube.com/watch?v=8i5PWEA3Fzk&list=TLGGGOqzL0uCxkIyMDA4MjAyNQ

About IBJR

The Brazilian Institute of Responsible Gaming (IBJR) was founded in 2023 and brings together the leading betting companies in Brazil and worldwide. Its mission is to build an honest, sustainable, and responsible online betting ecosystem, always defending a regulated market.

The organization’s work is based on two core pillars: combating the illegal market and promoting responsible gaming. IBJR believes that effective regulation is key to driving industry growth, strengthening the economy, and ensuring safety for both bettors and operators. That’s why it actively works to fight illegal betting, which operates outside the law, harms the industry, and puts society at risk.

IBJR’s members include the following operators: A2FBR, Alfa, bet365, BandBet, BetBoom, BetMGM, Betnacional, Betsson Group, Entain (Sportingbet and Betboo), EstrelaBet, Flutter Brazil (Betfair), Kaizen Gaming (Betano), KTO Group, Novibet, Skill on Net (Bacana Play and PlayUzu), and Todos Querem Jogar (Bet do Milhão). Associate members include: OKTO, Better Collective, Clever Advertising, OneKey Payments, and GeoComply.