Brazil Increases Gambling Taxes with New Law Signed by President Lula
Introduction to Brazil’s New Gambling Tax Law
Brazilian President Luiz Inácio Lula da Silva has signed a law that raises the taxation rate on gambling operators in the country. This new legislation will gradually increase the tax on betting companies from the current 12% rate to 15% by the year 2028.
Details of the Tax Increase and Legislative Process
The final approval came with Complementary Law No. 224, following earlier endorsement by both the Senate and the Chamber of Deputies in December. The Ministry of Finance states that the law aims to create a balance between fair taxation and encouraging growth in the gambling sector while ensuring more reliable government revenue.
Under the new tax guidelines, federal tax incentives for several industries will be cut by 10%. Specifically, for gambling operators, the tax on gross gaming revenue—which is the total revenue minus the payouts to bettors—will increase incrementally: from 12% in 2025 to 13% in 2026, then 14% in 2027, and finally reaching 15% from 2028 onwards.
This move follows Brazil’s rapid rise as the fifth largest sports betting market globally in its first year after legalization. The increase in taxes is also seen as a strategy to support the government’s financial goals ahead of upcoming general elections. However, during the legislative process, some senators voiced concerns that higher taxes could boost illegal gambling activities.
Projected Government Revenue and Allocation
Data from the Secretariat of Prizes and Betting shows that federal tax collections amounted to approximately BRL 3.32 billion (around $612 million) by September, while legalized operators generated BRL 27.7 billion ($5.1 billion) in revenue over the same period.
Complementary Law No. 224 also mandates that licensed gambling companies dedicate a portion of their revenue to social security funds—starting at 1% in 2026, increasing to 2% in 2027, and reaching 3% in 2028. The law further establishes joint financial responsibility for entities supporting illegal betting, including financial institutions that facilitate payments to unlicensed operators.
The finalized 15% tax rate is somewhat lower than the 18% rate initially proposed by the Senate’s Economic Affairs Committee for 2028. While operators consider the lower rate a moderate victory, there remain industry concerns about potential future taxes on player deposit transactions.
Implementation Timeline and Impact on Operators
Many provisions of Complementary Law No. 224 took effect earlier in the year following President Lula’s approval. However, Brazil’s constitutional requirement imposes a 90-day delay for new or increased taxes to become active after their publication. This means gambling operators will briefly experience the 12% tax rate before the increase to 13% begins later in 2026.
