Brazilian Finance Minister Fernando Haddad has confirmed gambling tax in the country will increase from 12% to 18% of GGR.The Brazilian Institute of Responsible Gaming or IBJR has spoken up about the increase in tax and said that this would result in the black market growing from 50% to 60%. Six of the largest gambling trade associations have also released a joint statement pointing out that the gambling sector has already contributed significantly to the country and to impose higher tax will be a burden.
Do you think that casinos would continue to want to operate in Brazil with these taxes? I am assuming that as a result, casinos would offer higher prices on their services as well due to the taxes and would most likely drive away customers. Would this eradicate the gambling sector altogether?
That’s a valid concern, Raising taxes on casinos could definitely backfire if operators are forced to raise prices or cut back on services, players might just go to the black market, where things are cheaper and less regulated. That’s what the IBJR is warning about, and it makes sense. Still, I don’t think it would wipe out the legal gambling industry in Brazil. The market is too big and full of potential. But if the government really wants the legal side to thrive, it needs to find a tax rate that’s fair and one that brings in revenue without driving businesses or players away.