President Luiz Inácio Lula da Silva has enacted Complementary Law No. 224, marking a pivotal step in the governance and taxation of sports betting operators in Brazil. This legislation, published in a special edition of the Diário Oficial da União, will commence in 2026. It aims to enhance government revenue while promoting regulatory compliance within the gaming sector by gradually increasing the gross gaming revenue (GGR) tax on fixed-odds betting from 12% to 15% by 2028. This measure is part of a broader fiscal strategy, including fintech regulation adjustments and changes to the Interest on Equity (JCP), projected to generate approximately R$20 billion.
Legislative Process and Approval
The proposal for this tax adjustment received overwhelming support in Brazil’s Chamber of Deputies, passing with 310 votes in favor and 85 against in July, following the substitute report to Complementary Bill 128/2025. It then advanced to the Senate, facilitated by Senate President Davi Alcolumbre, undergoing extensive review and negotiation before receiving presidential approval.
Accountability and Shared Tax Liabilities
A notable aspect of the law is the introduction of shared tax liability for financial and payment institutions processing transactions for unauthorized betting operators. This liability is contingent upon formal notifications from authorities, after which institutions must act within specified timeframes to avoid penalties. Similarly, entities promoting unlicensed operators are subject to joint responsibility. The Ministry of Finance will delineate the detailed implementation procedures. This initiative coincides with other legislative efforts addressing public security and financing, highlighting a coordinated regulatory approach.
Redistribution of Betting Tax Revenue
Complementary Law No. 224 also revises Article 30 of Law No. 13.756/2018, altering the allocation of betting tax revenues. Following set deductions, 85% of the revenue supports the operational and maintenance expenditures of licensed betting operators, 3% is allocated to social security, and 12% is directed towards public initiatives. In 2026, operators will retain 87% of revenues, with 1% dedicated to social security. The following year, these percentages will adjust to 86% and 2%, respectively. The Federal Revenue Service will oversee the monthly calculation and collection of these contributions, ensuring compliance with the prescribed regulations.
Negotiated Tax Rate
The final 15% tax rate is the result of a compromise. The Ministry of Finance initially proposed an 18% increase, but economic evaluations and legislative negotiations culminated in the gradual implementation of a 15% ceiling. Rapporteur Aguinaldo Ribeiro articulated the objective of the tax as curtailing illegal gambling practices that exploit vulnerable populations while enhancing the sector’s financial contribution to social welfare.
Strengthened Regulatory Framework
Beyond tax adjustments, the law fortifies regulatory oversight across the betting market, increasing scrutiny over financial transactions, advertising, and overall market conduct. Financial institutions and advertisers are now explicitly accountable for facilitating illegal operations post-notification. This move underscores Brazil’s aim to align fiscal targets with social responsibilities and regulatory compliance.
Future Steps
The enactment of Complementary Law No. 224 signals a new phase of stringent regulation where compliance is not optional, impacting all stakeholders within the betting ecosystem. Going forward, the Ministry of Finance and other relevant agencies will focus on implementing these provisions, setting the stage for heightened enforcement and market adaptation by 2028. The betting sector in Brazil must now navigate these evolving regulatory landscapes, balancing business objectives with adherence to reinforced legal standards.
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