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Home » Brazil’s Lula Administration Proposes Doubling Betting Tax

Brazil’s Lula Administration Proposes Doubling Betting Tax

Bartosz Hrydziuszko by Bartosz Hrydziuszko
November 12, 2025
in Regulatory Compliance
Reading Time: 3 mins read
President Luiz Inácio Lula da Silva is moving to revive plans to raise taxes on Brazil's betting and fintech sectors following the expiry of Provisional Measure 1,303. The proposal seeks to double the current betting tax rate from 12% to as high as 24%, with the government positioning the move as part of broader fiscal and social reform efforts.

President Luiz Inácio Lula da Silva is moving to revive plans to raise taxes on Brazil's betting and fintech sectors following the expiry of Provisional Measure 1,303. The proposal seeks to double the current betting tax rate from 12% to as high as 24%, with the government positioning the move as part of broader fiscal and social reform efforts.

The administration believes that industries generating substantial profits—including betting and digital payments—should contribute more toward funding public services and social programs. Lindbergh Farias, leader of the Workers’ Party (PT) in the Chamber of Deputies, has introduced legislation to formalize the higher rate and direct new revenue to social welfare initiatives.

“This measure is important, as Brazil already has more than 2 million people addicted to gambling, and cases of pathological gambling reported in the public health network increased by 300% between 2022 and 2024,” Farias stated.

Government Addresses BR30bn Revenue Gap

Government sources indicate the goal is to create a more balanced tax structure rather than restrict innovation. Finance Minister Fernando Haddad is reviewing the proposal as part of broader fiscal strategies to address a BR30bn ($5bn) revenue shortfall created by the expiration of MP 1,303. The administration has stressed the need for new revenue streams to maintain social commitments without increasing the deficit.

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Industry Group Raises Illegal Market Concerns

The Brazilian Institute for Responsible Gaming (IBJR) has expressed concern that higher taxes on regulated betting operators could strengthen the illegal market. The organization estimates that unlicensed platforms already account for approximately 51% of Brazil’s total wagering activity.

IBJR argues that excessive taxation of legal companies may drive players toward unregulated sites that neither contribute to public revenue nor uphold responsible gaming standards. The institute suggests that increasing formal market participation through enforcement and public education would generate more consistent income than raising tax rates.

Research conducted by consultancy LCA with Locomotiva indicates that Brazil’s illegal betting market generates approximately BR40bn ($6.8bn) annually, resulting in an estimated BR10.8bn loss in potential tax revenue. The institute’s analysis shows that each five-point increase in market formalization could produce approximately BR1bn in additional annual tax revenue.

Recent Legislative Setback

The IBJR noted that the withdrawal of Provisional Measure 1,303/2025 this week—shelved following a 251-193 vote in the Chamber of Deputies—already reduced expected tax collections. That measure would have raised the gross gaming revenue (GGR) tax from 12% to 18% and included a voluntary program for operators to pay taxes and fines on previous unreported activity.

Policymakers now face the challenge of balancing fiscal reform with the stability of Brazil’s developing betting framework. Industry experts have warned that over-taxing licensed operators could slow market growth and drive consumers back to offshore and unregulated platforms. The sector has called on lawmakers to strengthen enforcement measures rather than applying heavier tax burdens on compliant firms using the .bet.br domain.

Source: Brazil Gov

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Bartosz Hrydziuszko

Bartosz Hrydziuszko

Bartosz Hrydziuszko founded The iGaming Europe in 2024 and heads its content team. He sets the editorial direction with the Advisory Board and, with the editors, approves the fact sheet behind every story before the operations team publishes it.

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