Brazil Increases Betting Taxes but Delays Casino Legalization

Brazil Adjusts Betting Tax Policies Amid Cautious Approach

Brazil has recently taken significant steps to revise its gambling regulations. Lawmakers have approved increased taxes on betting activities but decided to delay the much-anticipated legislation that would legalize land-based casinos. This approach highlights a cautious governmental stance that aims to boost gambling tax revenue while carefully considering major reforms.

Substantial Tax Increases Announced for Betting Operators

The Brazilian Senate approved bill PLP 128/2025 with a strong majority of 62 to 6. This bill reduces federal tax incentives across various sectors and gradually implements higher taxes on fixed-odds sports betting. Licensed betting operators will face a 10% cut in tax incentives split between 2025 and 2026, increasing their operational expenses before the new tax rates take full effect.

Additionally, the tax rate on gross gaming revenue (GGR) from sports betting will increase incrementally over three years: from 12% currently to 13% in 2026, 14% in 2027, and reaching 15% in 2028. Although this final rate is lower than an 18% target previously considered, it still represents a notable rise in tax burdens for operators.

The government has pledged that part of the extra revenue generated from these tax increases will support social security and public health initiatives. Legislators emphasize that the reforms are necessary to address financial distortions caused by generous tax incentives and to improve fiscal accountability. The bill now awaits approval from President Luiz Inácio Lula da Silva.

Casino Legalization Faces Setbacks and Will Proceed Cautiously

Despite strong backing for tax reforms, progress toward legalizing land-based casinos remains uncertain. The Senate voted 36 to 28 against fast-tracking bill PL 2.234/2022, a proposal that would authorize physical gambling establishments such as casinos, bingo halls, jogo do bicho, and regulated horse race betting.

This rejection means the casino legalization bill will undergo the regular legislative process rather than an expedited one. The proposal has already passed the Chamber of Deputies and received positive assessments but faces ongoing opposition. Critics, including the influential Evangelical Caucus, warn that expanding land-based gambling could increase addiction rates and facilitate criminal activities, including money laundering and human trafficking.

Senator Eduardo Girão described the proposal as deeply divisive, cautioning against prioritizing economic incentives at the expense of social welfare. On the other hand, supporters argue that establishing casinos could enhance tourism and provide valuable tax revenue, particularly benefitting economically challenged regions. Overall, the Brazilian government appears committed to a balanced and measured approach, emphasizing financial prudence over sweeping changes.