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Brazil Faces Tax Losses as Bettors Shun Legal Sites

Brazil Faces Tax Losses as Bettors Shun Legal Sites

Abby Richards • Published: June 18, 2025 at 10:38 • Updated: June 18, 2025 at 10:38

The Essentials at a Glance

Despite new laws and enforcement efforts, many Brazilians still place bets on unlicensed gambling sites. A recent national survey shows 73% of bettors used such platforms in early 2025. Most of them struggle to identify which sites are legal. As a result, Brazil loses significant tax revenue and faces ongoing challenges in regulating its online betting market.

Unlicensed Platforms Still Dominate

Between April and May 2025, Instituto Locomotiva conducted a survey commissioned by IBJR (Brazilian Institute of Responsible Gaming) and LCA Consultoria. The results are striking: nearly three out of four bettors used unlicensed platforms. These sites operate outside the rules, offering services like anonymous betting, credit card funding (which is banned), and cryptocurrency transactions.

Estimates suggest that unlicensed operators make up 41% to 51% of Brazil’s online betting market. In just three months, this activity led to around $486 million in lost tax revenue. Projected annually, this could reach up to R$10.8 billion (about $1.8 billion).

Legal vs. Illegal: Confusion Among Users

A major issue is user confusion. Around 80% of respondents said they couldn’t tell if a site was government-approved. Legal betting platforms in Brazil must meet strict criteria under SPA (Secretaria de Prêmios e Apostas) regulations. These include:

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– “.bet.br” domain
– Facial recognition for identity verification
– Deposits only via Pix (instant payment system) or debit
– Loss limits and self-exclusion options

Many users remain unaware of these requirements, making them easy targets for illegal operators.

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Government Response and Tax Concerns

To address the issue, Brazil increased the tax rate on legal betting operators from 12% to 18% in June 2025. However, IBJR President Fernando Vieira warns this move may backfire. With the upcoming Selective Tax, total tax pressure could approach 50%, potentially making legal operations financially unviable.

Need for Public Education and Enforcement

Renato Meirelles from Instituto Locomotiva emphasizes the importance of clear public messaging. Illegal platforms often exploit the lack of awareness among users, particularly those with lower income or education levels.

Since January 2025, authorities have taken down over 11,000 illegal domains. Still, enforcement alone isn’t enough. Stronger oversight, better public education, and tougher penalties are needed to protect users and support the legal market.

Our Assessment

Brazil’s online gambling market is growing fast, but regulation hasn’t kept pace. Most users still turn to unlicensed platforms, often without realizing it. While enforcement efforts are underway, public education and smarter regulation are essential. Raising taxes on legal operators may do more harm than good if it drives users further into the unregulated space. Clear rules, better communication, and practical enforcement could help shift the balance toward a safer, legal market.

Sources

– Instituto Locomotiva
– IBJR (Brazilian Institute of Responsible Gaming)
– LCA Consultoria

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