Brazil Betting Boom Faces New Reality as Government Charts Path to Higher Taxes
Brazil is set to tighten its grip on the booming sports betting industry after President Luiz Inácio Lula da Silva approved new legislation raising taxes on wagering operators. Under the law, the tax rate on betting companies will gradually climb to 15 percent by 2028, up from the current 12 percent.
The levy is calculated based on gross gaming revenue, which is the amount operators retain after paying out winnings to customers. The move follows a rapid expansion of Brazil’s regulated betting market, which surged to become the world’s fifth-largest in its first year of legalization, prompting lawmakers to seek a larger share of the industry’s profits.
Complementary Law No. 224 introduces a 10 percent reduction in federal tax incentives across multiple industries and includes a phased tax hike for licensed gambling operators. The measure will push the tax on gross gaming revenue from its current 12 percent to 13 percent in 2026, followed by an increase to 14 percent in 2027, before reaching a permanent rate of 15 percent starting in 2028.
According to the Ministry of Finance, the policy is designed to strike a balance between fostering industry growth in Brazil and strengthening tax oversight, while giving the government a more stable and predictable stream of revenue.
How Much Income Can The Brazilian Government Expect?
Figures released by the Secretariat of Prizes and Betting indicate that federal tax receipts reached BRL 3.32 billion (about $612 million) through September, as regulated betting operators generated BRL 27.7 billion ($5.1 billion) in revenue over the first nine months of the year.
Within the gaming and wagering industry, the legislation outlines a step-by-step increase in taxes on online sports betting platforms. A portion of the funds raised will be directed toward social security and public healthcare programs, and the law introduces sanctions for advertising illegal betting services or facilitating transactions with unlicensed operators.
Concerns Still Linger For Black Market Betting
Despite the government’s aims, industry groups have voiced apprehension over the potential consequences for licensed operators, warning that higher taxes could push Brazil bettors toward unregulated platforms. Recent reports suggest the black market still accounts for roughly 55 percent of total betting revenue.
The Brazilian Institute for Responsible Gaming has cautioned that the changes risk weakening the regulatory framework and giving illegal operators a competitive advantage.
In a statement made in October, the institute said that combatting the illegal markets “must be a priority”, and that measures to weaken the regulated betting environment only benefit those operating outside of the law.
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