On December 1, 2025, Brazil’s Senate Economic Affairs Committee approved a significant tax hike for the betting and iGaming sectors, deciding to gradually increase the gross gaming revenue (GGR) tax from 12% to 18% over the next three years. The approval came with a vote of 23 to one in favor of Bill PL 5.473/2025, and the proposal will now proceed to the Chamber of Deputies for further scrutiny and debate.
Currently, under Law 14.790/2023, licensed operators pay 12% of their GGR to the federal government. This rate, however, is poised to rise incrementally, reaching 15% in 2026 and 2027, and culminating at 18% in 2028. The tax calculation is based on GGR, which is the total stakes received minus prizes paid out to players. The additional revenue generated from this increase is primarily destined for Brazil’s social security budget, with a focus on health-related spending. Furthermore, between 2026 and 2028, the federal government could redirect a portion of these funds to local governments, including states and municipalities.
This gradual increase replaces a more drastic original proposal that suggested doubling the tax rate to 24% in one leap. The initial proposal met with strong opposition from industry stakeholders. A Brazilian iGaming analyst criticized the 24% rate as potentially market-crippling, with concerns that such a steep increase could drive consumers back to unlicensed platforms and severely compress margins for compliant businesses. In response to these concerns, Senator Eduardo Braga, the bill’s rapporteur, adjusted the proposal to a more moderate path, arguing that a sudden tax hike would unfairly penalize those within the legal framework while leaving illicit operators unaffected.
Senator Renan Calheiros, the author of the bill, supported the compromise, noting that it balances the need to boost social funding with the necessity of maintaining a viable regulated market. He asserted that while the government needs additional revenue, it should not come at the expense of the stability of the newly regulated sector.
The debate over increasing gambling taxes is part of a broader fiscal strategy by President Lula’s administration. The government is under pressure to meet ambitious fiscal targets, and tapping into the rapidly growing betting sector presents an attractive option for raising revenue. Previous attempts to increase the GGR rate through provisional measures encountered resistance in Congress earlier this year, prompting a reconsideration of the approach.
The Ministry of Finance has projected that new taxes on betting and fintech firms could generate up to BRL 18 billion in additional revenue from 2026 to 2028. However, October 2025 saw the first notable decline in month-on-month betting tax receipts since the market’s regulation in January, with collections falling 9.4% from September to BRL 1.09 billion. This fluctuation has intensified discussions on the potential impact of government action on the industry’s long-term growth.
Industry stakeholders have expressed concerns about the cumulative tax burden on operators. They emphasize that the GGR levy is just one component of a complex tax structure in Brazil, which, according to analysts, places significant pressure on regulated entities compared to global peers. Trade groups and local licensees caution that increased taxes could hinder regulated operators’ ability to compete with offshore sites, affecting odds, bonuses, and investments in products, which are vital for attracting bettors to the legal market.
Moreover, PL 5.473/2025 also proposes raising social contribution rates (CSLL) for payment institutions and fintechs related to betting transactions. From 2026, payment institutions will see their CSLL rise from 9% to 12%, and further to 15% in 2028. Credit and investment fintechs will experience a similar trajectory, increasing from 15% to 17.5% and then to 20%. Banks, already paying 20%, will maintain their current rate.
These changes mean that the financial partners facilitating sportsbook and casino transactions will also face increased taxation, potentially influencing service pricing and impacting operators’ cost structures.
As the bill moves to the Chamber of Deputies, it will be reviewed by relevant committees before a floor vote. Any amendments by the deputies would require the bill to return to the Senate. If passed without changes, it heads directly to the President for approval or veto. The outcome of this legislative process will have significant implications for Brazil’s betting industry and its regulatory environment in the coming years.
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