In 2025, Brazil’s burgeoning gambling market, which only saw regulation come into effect earlier this year, is now facing another challenge as a new bill proposes to double the gambling tax rate to 24%. This move, according to industry experts, could severely impact the stability of the sector before it has a chance to mature. As the market grapples with this potential change, operators and experts are expressing significant concern about the implications of such a tax hike.
Elvis Lourenço, an iGaming consultant and managing partner at EX7 Partners, has been vocally critical of the proposed tax increase. He describes the 24% tax rate as “insane,” warning that it could effectively collapse the gambling market. “Doubling the taxes would crush growth and push more businesses towards the black market,” he remarked, highlighting the adverse effects of such a steep tax rise.
The proposed legislation, known as bill PL 5,076/2025, comes on the heels of a failed attempt by the government to increase the gambling tax rate from 12% to 18% earlier in the month. While that proposal was retracted, the current bill not only revives but escalates the previous plan by targeting 24% of the gross gaming revenue (GGR). Despite the unsettling potential of this new bill, Lourenço sees a glimmer of hope in negotiation; he believes a more acceptable tax scenario would fall between 15% and 18%, as previously discussed.
Political motivations are also at play in the push for higher gambling taxes. With elections looming, President Lula’s government appears to be leveraging gambling taxation as part of a broader political strategy. The administration’s narrative has revolved around increasing taxes on what they refer to as the “three Bs”: billionaires, banks, and betting. Lourenço suggests that this new bill is a reaction to political embarrassment rather than a well-considered fiscal policy, noting, “This becomes an election agenda. It’s good for the speech of the actual government.”
Operators in Brazil have been vocal about the already heavy tax burdens they face. The focus may be on the proposed 24% rate, but existing obligations include a 12% GGR tax, a 9.25% PIS/Cofins levy, municipal taxes up to 5%, and a 34% tax on profits through corporate income and social contributions. Comparing Brazil’s tax situation to more mature markets like the UK or Spain may be misleading, as Brazil’s effective tax burden is among the highest globally, according to industry voices.
A significant concern for licensed operators is that the government’s efforts seem more focused on taxing legal operations rather than addressing the thriving illegal gambling market. Illegal gambling is estimated to account for over half of Brazil’s total betting revenue, yet it appears to be largely ignored by the current regulatory efforts. “They are targeting to increase the taxes but are not targeting to combat illegal gambling,” Lourenço pointed out. The expert advocated for more effective revenue distribution to support essential public sectors like health and education and suggested that enforcement funding should be increased.
Amidst these discussions, industry stakeholders are calling for dialogue and a more balanced tax framework to foster sustainable growth. As Brazil’s Chamber of Deputies deliberates on the timing of the vote on this bill, the market remains vigilant. Lourenço and others believe a compromise around an 18% tax rate would best support the emerging gambling sector, echoing past discussions within the sports betting bill of 2023.
From the operators’ perspective, the current situation underscores the rapid evolution of Brazil’s gambling market. It is a convergence of tax policy, political maneuvers, and unaddressed black-market competition that could potentially shape the future of iGaming in the country. The crucial question remains: will Brazil pursue immediate revenue increases, or will it opt for a long-term growth strategy for its regulated gambling industry?
As these debates unfold, there is a clear division in opinions among experts and operators alike. While some agree with Lourenço’s skepticism regarding the aggressive tax proposal, others argue that increased taxation might be necessary to curtail the rapid proliferation of gambling and ensure that the industry contributes significantly to national revenues. This latter viewpoint suggests that with proper enforcement and regulation, higher taxes could be a tool for both economic and social governance.
Ultimately, the decision on how Brazil chooses to develop its gambling market will have significant implications not only for the industry but also for its role within the broader national economy. The outcomes of these legislative discussions will determine whether Brazil creates a dynamic and sustainable gambling environment or one that drives operators into the shadows of the black market due to prohibitive tax policies.
James Miller is a distinguished casino strategy expert with a wealth of experience in the gambling world. At CasinoNoDeposits.com, James focuses on crafting effective gaming strategies and providing insightful reviews to guide players towards making informed decisions. His deep understanding of casino mechanics and promotional offers makes him a valuable asset to the team. Dedicated to educating players, James ensures that every piece of content is accurate, actionable, and reader-friendly.
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