Brazil Senate committee approves gradual betting tax rise to 18%

• Senate Economic Affairs Committee backs phased tax increase from 12% to 18% by 2028.
• Bill passes 21-1 vote after original 24% proposal scaled back following industry opposition.
• Measure now advances to Chamber of Deputies with government backing for fiscal package.

Brazil’s Senate Economic Affairs Committee has approved a gradual increase in the gross gaming revenue (GGR) tax on betting operators. The measure will raise the rate from the current 12% to 18% by 2028.

The committee voted 21-1 on 3 December to endorse Bill PL 5.473/2025. The bill now advances to the Chamber of Deputies for further review unless senators request a plenary vote within five working days.

Phased implementation timeline

Under the approved proposal, the tax rate will increase in stages. Operators will pay 15% on gross gaming revenue during 2026 and 2027. The rate then rises to 18% from 2028 onwards.

The phased approach represents a revision of the original bill introduced by Senator Renan Calheiros. His initial proposal sought to double the betting tax from 12% to 24% of gross gaming revenue in a single increase.

Rapporteur Senator Eduardo Braga reduced the proposed rate to 18%. He recommended implementing the change over two stages to avoid destabilising the newly regulated market.

“Our concern is that the intended increase, which abruptly doubles the current percentage, will harm already legalised companies, while irregular ones will continue to operate with impunity and without paying a single cent to the public coffers,” Senator Eduardo Braga said.

The government projects the increase will generate BRL 18 billion in additional revenue between 2026 and 2028. This includes an estimated BRL 5 billion in 2026, BRL 6.3 billion in 2027 and BRL 6.7 billion in 2028.

Revenue from the higher tax will be directed to social security programmes. Priority will be given to health initiatives under the approved measure.

Between 2026 and 2028, the federal government may transfer part of the additional resources to states, the Federal District or municipalities. This provision compensates for losses tied to income tax exemptions for civil servants.

Current tax framework

Licensed operators currently pay 12% of their gross gaming revenue to the federal government. This rate was established under Law 14.790/2023 when Brazil launched its regulated online betting market in January 2025.

Gross gaming revenue represents total stakes received minus prizes paid to players. Operators also pay corporate income tax, social contributions and other applicable charges alongside the GGR levy.

The additional tax burden applies only to operators holding federal licences. Each licence costs BRL 30 million and grants authorisation for five years of operation.

Industry response

The Brazilian Institute of Responsible Gaming expressed concern about the tax increase. The organisation represents major licensed operators including Bet365, Betano, Betsson, Entain and Flutter.

The IBJR welcomed stronger measures against illegal operators included in the bill. The organisation criticised the tax hike itself.

“Raising the tax burden on betting companies operating under the regulation of the Secretariat of Prizes and Betting does not strengthen the newly regulated sector,” the IBJR said in a statement.

“On the contrary: it encourages the growth of the clandestine market, reduces the competitiveness of licensed companies and, ultimately, puts the consumer at risk.”

The institute has previously warned that tax increases could push consumers back to unlicensed platforms. Industry estimates suggest illegal operators still account for approximately 50% of Brazil’s betting activity.

Brazilian iGaming analyst Elvis Lourenço had called the original 24% proposal “insane” in earlier comments. He warned such a rate could “collapse the market” by pushing players to unlicensed sites and erasing margins for compliant brands.

Additional measures

The bill introduces new compliance requirements for internet and telecommunications companies. Providers must maintain a permanent communication channel with the Secretariat of Prizes and Bets.

This provision aims to facilitate cooperation in blocking illegal betting websites. Companies that fail to comply could face fines or temporary suspension.

The measure also expands powers to sanction sites and companies linked to illegal betting operations. Match-fixing violations fall under the same enforcement framework.

Banks and payment processors must implement procedures to flag suspicious transactions related to betting. Telecommunications companies are banned from working with black market operators.

Fintech tax increases

The same bill raises social contribution rates for fintech companies closely tied to betting payments. Payment institutions will see their CSLL rate rise from 9% to 12% in 2026, then to 15% in 2028.

Credit and investment fintechs face increases from 15% to 17.5%, then to 20% on the same timeline. Traditional banks already pay 20% and maintain their current rate.

These changes affect key processing partners for sportsbooks and casino operators. Higher costs for payment providers could influence service pricing and impact operators’ overall cost base.

The bill also raises withholding income tax on distributions of Interest on Equity from 15% to 17.5%.

Legislative path forward

If the Chamber of Deputies approves the bill without modifications, it will proceed directly to President Luiz Inácio Lula da Silva for sanction or veto. Any amendments will require the bill to return to the Senate for confirmation.

The measure represents a key component of the government’s fiscal strategy. Finance Minister Fernando Haddad has backed the proposal as part of broader efforts to boost public revenues.

The administration previously suffered a setback when Congress rejected a provisional measure to increase the betting tax by 50%. Analysts suggest this defeat prompted the government to pursue a more gradual approach.

October data showed the first month-on-month drop in betting tax receipts since the regulated market opened. Collections slipped 9.4% from September to BRL 1.09 billion. This decline has intensified debate over sustainable tax levels.

National self-exclusion platform

The Ministry of Finance announced on 3 December the launch of Brazil’s national self-exclusion platform for betting. The tool will become available to the public on 10th December 2025.

The platform allows citizens to voluntarily block access to betting sites and stop receiving advertising from the sector. Users can select blocking periods of one, three, six or 12 months, or choose indefinite exclusion.

“We are giving people the possibility to decide whether they want to temporarily restrict their exposure to betting, in a centralised and secure way, including reducing their access to advertising,” Regis Dudena, Secretary of Prizes and Bets, said.

“This is a step forward that puts Brazil in a leading position in the world in caring for our population.”

The government also launched the Health Observatory on Gambling Disorders on 8 December. The initiative represents a formal partnership between the Ministry of Health and the Ministry of Finance.

“The agreement formalises not just a valuable tool for putting public policies into action but a framework,” Dudena said. “It provides a structured flow of information between agencies and lays out the policies for prevention, risk reduction, and assistance to people with harmful gambling-related behaviours.”

Finance Minister Fernando Haddad described the Observatory as connecting fiscal responsibility with social welfare.

“We are very concerned about gambling-related issues; they affect families and have a huge impact on the economy,” Fernando Haddad, Finance Minister, said.

The Secretariat of Prizes and Bets also opened a public consultation on 1st December for its 2026-2027 regulatory agenda. Submissions remain open until 14th January 2026, with the final agenda expected by late February.

50% rise in tax rate over 3 years

Brazil’s betting market remains in its first year of federal regulation. The country launched its licensing system in January 2025 after years of planning and legislative work.

Multiple international operators have secured licences and begun operations. The market was expected to become one of the largest regulated betting markets globally.

Licensed operators structured their business plans based on the 12% GGR rate established in 2023 legislation. The approved increase represents a 50% rise in the headline tax rate over three years.

Industry representatives argue the total tax burden extends beyond the GGR levy. Operators must also account for corporate taxes, social contributions, licensing fees and supervision charges.

Some analysts have calculated Brazil’s effective tax rate on operators approaches 30% when all levies are combined. This places the country among the higher-taxed betting jurisdictions internationally.

What’s next

The phased implementation provides operators time to adjust business models. The gradual increase may help preserve market stability compared to an immediate doubling of the rate.

The government faces pressure to demonstrate the regulated market can generate substantial tax revenue. This must be balanced against maintaining conditions that encourage operators to remain licensed and competitive against illegal alternatives.

Brazil’s approach to betting taxation will likely influence other Latin American countries considering market regulation. The outcome could shape regional policy debates on sustainable tax structures for online gambling.