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The Brazil Senate Economic Affairs Committee (CAE) voted 23 to one on Tuesday to approve Bill 5,473/2025, establishing a phased increase in gambling taxation that will take licensed betting operators from the current 12% gross gaming revenue (GGR) rate to 18% over a three-year period.
Under the approved legislation, sports betting and online gaming companies operating under regulation from the Secretariat of Prizes and Betting (SPA) will face a 15% tax rate in 2026 and 2027, before the rate increases to 18% from 2028 onwards.
The bill was originally authored by Senator Renan Calheiros (MDB-AL), president of the Economic Affairs Committee, who had proposed a more aggressive increase to 24%. However, rapporteur Senator Eduardo Braga (MDB-AM) reduced the proposed rate to 18% with a gradual implementation timeline.
“Our concern is that the intended increase, which abruptly doubles the current percentage, will harm already legalised companies, while irregular ones will continue to operate with impunity and without paying a single cent to the public coffers,” Senator Braga stated.
Revenue Allocation and Fiscal Measures
The additional tax revenue generated will be directed to social security, with priority given to actions in the health sector. Between 2026 and 2028, the federal government will have the option to transfer portions of the resources to states, the Federal District, and municipalities to compensate for losses resulting from Personal Income Tax exemptions on civil servant income.
The legislation also increases taxation on fintech profits and raises the Income Tax rate on the distribution of Interest on Equity, partially recovering revenue measures originally proposed in a provisional measure that was rejected earlier this year.
Measures Against Illegal Operators
The approved bill includes mechanisms to combat illegal betting operations that continue to function without authorization from the Secretariat of Prizes and Betting. The report mandates that the government adopt effective procedures to shut down illegal websites and require payment institutions and financial institutions to provide information about transactions with irregular companies.
Industry Response
The Brazilian Institute of Responsible Gaming (IBJR), which represents 75% of Brazilian betting companies, issued a statement following the CAE approval. While praising the committee’s decision to strengthen the fight against illegal gambling, the IBJR criticized the tax increase for licensed operators.
The organization stated that raising the tax burden on betting companies operating under SPA regulation does not strengthen the newly regulated sector. "On the contrary: it encourages the growth of the clandestine market, reduces the competitiveness of licensed companies and, ultimately, puts the consumer at risk."
Next Steps
Following the CAE’s final vote, the proposal now moves to the Chamber of Deputies for discussion and voting. If approved without changes, the legislation will be sent to President Lula for sanction. Should the bill be published, the new tax rates would take effect from the first day of the fourth month following publication.
The legislation represents the government’s continued efforts to increase gambling tax revenue ahead of next year’s general election, following the rejection of an earlier provisional measure that sought to increase the gambling tax by 50%.
Source: Games Magazine Brasil
