Brazil Confirms Gradual Tax Increases for Gambling Licensees

Brazil has formally approved a gradual increase in taxes applied to licensed gambling operators, setting out a multi-year schedule that will raise the rate on gross gaming revenue to 15% by 2028. The changes follow presidential approval of new legislation that also tightens compliance rules and expands tax obligations linked to the regulated betting market.

President Luiz Inácio Lula da Silva gave final approval last week to Complementary Law No 224, after both the Senate and the Chamber of Deputies endorsed the proposal in mid-December. The law amends the existing tax framework by reducing federal tax benefits across several sectors while introducing higher levies on gambling companies operating under Brazil’s licensing regime.

Under the new framework, the current 12% tax on gross gaming revenue will increase to 13% in 2026. The rate will then rise again to 14% in 2027 before reaching 15% from 2028 onward. The phased approach sets a defined timeline for operators as the market continues to adjust to formal regulation introduced at the start of 2025.

Although many provisions of Complementary Law No 224 took effect with the new year, the higher gambling tax rate will not apply immediately. Brazil’s constitution requires a 90-day waiting period for any new or increased taxes, starting from the date of publication. This provision grants licensed operators a brief transition period before the 13% rate becomes enforceable in 2026.

In addition to the increase in headline tax rates, the law introduces a separate obligation tied to social security funding. From 2026, operators must allocate 1% of collected revenue to social security. That share will increase to 2% in 2027 and then to 3% in 2028, adding another cost layer as the market matures.

The legislation also establishes joint tax liability for companies that promote illegal betting platforms. This responsibility extends beyond advertisers to include financial institutions and payment providers that facilitate transactions for unlicensed operators, expanding enforcement beyond gambling firms themselves.

The final rate approved by Lula is lower than an earlier proposal debated in the Senate. In early December, the Senate’s Economic Affairs Committee backed PL 5,473/2025, which outlined an 18% tax rate for gambling operators by 2028. That proposal faced resistance within Congress, prompting lawmakers to pursue an alternative legislative route.

The approved text, PLP 128/2025, emerged as a political compromise after attempts to return the higher-rate bill to the Senate plenary led to procedural delays. With the government recess approaching later in December, prospects for advancing the 18% proposal diminished, clearing the way for the lower, phased structure now set in law.

While some operators may view the 15% ceiling as a more manageable outcome, concerns persist across the licensed sector regarding additional fiscal measures still under consideration.

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One unresolved issue involves a potential tax on player deposits. In December, the Senate plenary approved a 15% levy on deposits made by players to licensed gambling platforms. Because lawmakers amended the bill, it must return to the Chamber of Deputies for further review before it can advance to the president for final approval.

At the same time, Brazil has introduced the CIDE-Bets tax, with proceeds earmarked for the National Public Security Fund. Authorities expect this levy to generate approximately BRL30 billion, or about $5.5 billion, per year, adding to the overall fiscal contribution required from the sector.

Another development affecting operators is the reintroduction of the RERCT Litígio Zero Bets mechanism through the Antifaction Bill. This measure requires a 15% retrospective tax on gambling activities conducted between 2018 and 2024, covering the period prior to full market regulation that began on 1 January 2025.

Legal analysts have raised concerns about the cumulative effect of these policies on market participation. Udo Seckelmann, head of gambling & crypto at Brazilian law firm Bichara e Motta Advogados, warned the CIDE-Bets tax could risk channelisation to licensed platforms dropping below 20%.

As Brazil continues to shape its regulated gambling environment, the newly approved tax increases mark a significant step in defining long-term costs for operators, while debates over additional levies and compliance requirements remain ongoing.

Source:

, igamingbusiness.com, January 2, 2025.