VBET’s Ariel Litvac has warned that the appetite for the Brazilian market is becoming increasingly selective as tax uncertainty elevates.
Speaking to iGaming Expert, he emphasised the importance of data-driven dialogue with the industry and policymakers, as a crucial election looms in the country.
How is the uncertainty surrounding taxation impacting the current performance of the Brazilian market?
There is broader legal uncertainty, not only tax-related. However, focusing specifically on taxation, the current environment delays investment decisions, increases unfair competition due to the illegal market and makes long-term planning more difficult. As a result, predictability decreases and expansion slows down.
Has the appetite for the market dwindled as a result of tougher taxation rates?
The appetite has not disappeared, but it has become more selective. Well-capitalised operators with strong governance structures are able to adjust their business models and products to mitigate direct impacts. Less structured operators, however, tend to feel margin compression more significantly.
What challenges have occurred as a result of the constantly increasing tax rate?
The main challenge is preserving economic sustainability. Operators must recalibrate customer acquisition costs, bonus policies and margins, renegotiate terms with suppliers and continuously improve systems and internal controls to maintain efficiency and compliance.
How does tax uncertainty strengthen the black market in Brazil?
The illegal market clearly benefits from this scenario, as it does not bear tax or regulatory obligations. Strengthening enforcement against illegal operators is urgent and requires coordinated action, not only from the regulator, but also from banks and payment providers.
What steps can operators take to stay ahead of potential financial headwinds caused by tax changes?
Operators should adopt scenario planning, tax stress testing and integrated governance between tax, finance and compliance teams. Reviewing commercial conditions with partners, improving operational efficiency and prioritising customer retention are also essential strategies.
What impact would an additional tax on player deposits have on the market?
A deposit tax would be counterproductive for the industry and would likely accelerate the consolidation of the illegal market. Few industries impose such friction at the entry point of the customer journey. Policymakers should consider alternative revenue strategies that do not further weaken the regulated market.
What can industry stakeholders do to better engage with the government and help provide clarity and stability?
The industry must engage in coordinated, data-driven dialogue, demonstrating that regulatory stability increases tax collection, strengthens consumer protection and improves enforcement against illegal operators. Clear timelines and structured transition periods are also essential.
Do you believe gambling tax rates will be a relevant discussion in the upcoming elections in Brazil?
Yes, as the issue is directly linked to federal revenue and consumer protection. The industry is currently in the spotlight and during election cycles, high-visibility topics tend to gain greater space in public debate. We will need to closely monitor how this develops.
