Brazil President Signs Gambling Tax Increase to 15%

Brazilian President Luiz Inácio Lula da Silva has signed Complementary Law No. 224/2025 into effect, implementing a gradual tax increase on sports betting operators that will raise the rate on gross gaming revenue (GGR) from 12% to 15% by 2028.

The legislation, published in a special edition of the Diário Oficial da União, marks a significant shift in how Latin America’s largest gambling market taxes its operators.

Phased Tax Implementation Timeline

The tax increase will be implemented gradually over three years, giving operators time to adjust their business models. Under Brazil’s constitution, any new or increased taxes are subject to a 90-day waiting period from the date of publication before taking effect.

Revenue Allocation Structure

Complementary Law No. 224 fundamentally restructures how betting tax revenues are distributed. The new allocation formula prioritizes social programs while maintaining operator viability.

The law also introduces joint tax liability for entities that advertise illegal betting sites, as well as financial institutions and payment companies that do business with unlicensed operators—a measure designed to choke off revenue streams to the black market.

Lower Than Originally Proposed

The final 15% rate represents a compromise from earlier proposals. In early December, the Senate’s Economic Affairs Committee approved PL 5,473/2025, which set out an 18% rate for operators by 2028. The lower rate in the final legislation was seen as a small victory for the gambling industry.

Brazil’s Booming Gambling Market

The tax increase comes as Brazil’s regulated gambling market experiences explosive growth. The Secretariat of Prizes and Betting (SPA) confirmed gross gaming revenue of R$17.4 billion ($3.2 billion) in just the first six months of 2025, with 17.7 million active bettors participating in the regulated market.

The Ministry of Finance confirmed that 66 companies received full licenses to operate, with an additional 52 granted provisional licenses. Major international operators like Bet365, Betfair, and SportingBet secured their licenses, while prominent names such as PixBet and SportsBet.io failed to meet requirements.

Industry Concerns and Warnings

Despite the lower-than-expected final rate, the gambling industry has expressed concerns about the cumulative tax burden and its potential to drive activity to unlicensed operators.

“The intention is to curb the proliferation of illegal and dishonest gambling that exploits the vulnerabilities of the population, especially those with low incomes, and to expand the contribution that betting houses make to society.”
— Congressman Aguinaldo Ribeiro

The Brazilian Institute for Responsible Gaming warned that the measure could undermine regulatory goals and strengthen illegal competition. Approximately 30% of the Brazilian betting market still operates offshore, and since October 2024, the National Telecommunications Agency has taken down over 15,000 illegal betting websites.

Player Tax Rates Remain at 15%

While operators face the GGR tax increase, player taxation remains stable. Net winnings from fixed-odds lottery bets are subject to a 15% Personal Income Tax (IRPF) rate—a significant reduction from the initially proposed 30% tax. The tax applies only to net winnings exceeding R$2,428.80 annually, with losses deductible against winnings. This approach mirrors how other countries handle gambling tax deductions.

Casino Legalization Remains Stalled

While online sports betting taxation moves forward, Brazil’s land-based casino legalization remains in limbo. The Senate rejected a request to fast-track Bill No. 2,234/2022, which would have legalized casinos, bingo halls, and the traditional numbers game known as “jogo do bicho.”

Lawmakers voted 36-28 against granting urgency to the bill during the chamber’s final deliberative session of 2025. The proposal will now follow the Senate’s ordinary legislative procedure, with no date set for a final vote. Strong opposition from evangelical lawmakers has been a key factor, with leaders warning they would publicly name legislators who supported the proposal.

Government’s Fiscal Motivation

President Lula has significant fiscal motivations for the tax increase. The government has announced R$300 billion in social spending planned for 2026 alone, and the gambling sector represents a growing revenue source. The first year of market activity has already returned approximately R$3.8 billion to the state as of October 2025.

Revenue from the newly created CIDE-Bets tax will be directed to the National Public Security Fund, with the levy expected to generate around R$30 billion ($5.5 billion) annually once fully implemented.