Brazil Senate Approves Gradual Rise in Betting Tax
Brazilian betting and iGaming operators are preparing for higher tax obligations after the Senate’s Economic Affairs Committee (CAE) approved a staged increase in the gross gaming revenue (GGR) levy. The committee endorsed Bill PL 5.473/2025 with a vote of 23 to 1, setting the federal GGR rate to rise gradually from 12% to 18% over three years. The bill now moves to the Chamber of Deputies for further consideration.
Gradual Increase Replaces Initial Proposal
Under current legislation (Law 14.790/2023), licensed operators pay 12% of GGR, in addition to corporate income tax, social contributions and other charges. The newly approved bill outlines a phased increase: 15% in 2026 and 2027, then 18% from 2028 onward. Collections are based on total stakes minus player payouts, with revenue earmarked primarily for social security and health funding.
The initial draft had proposed a sharp jump to 24%, which triggered industry criticism. Analyst Elvis Lourenço described it as “insane,” warning that such a spike could drive players toward illegal platforms and erode margins for compliant operators. Senator Eduardo Braga, acting as rapporteur, moderated the proposal to balance social funding goals with market sustainability.
Government Perspective and Fiscal Context
Senator Renan Calheiros, the bill’s author, emphasized the measure as a method to increase social contributions while safeguarding the nascent legal market. The tax reform aligns with President Lula’s broader fiscal objectives, aiming to meet deficit targets by tapping into the rapidly expanding betting sector. The Finance Ministry projects the cumulative revenue increase from higher GGR and fintech levies could reach BRL 18 billion between 2026 and 2028.
October data revealed a 9.4% month-on-month drop in betting tax receipts, the first since the regulated market launched in January 2025. This decline has intensified debate over the acceptable tax ceiling for the sector without jeopardizing long-term growth.
Industry Concerns Over Cumulative Burden
Operators caution that the GGR levy is only part of the broader tax structure in Brazil. Once all layers are considered, effective taxation already ranks among the highest globally. Trade bodies warn that excessive taxation could reduce licensed operators’ competitiveness versus offshore platforms, potentially undermining channelization the flow of betting through regulated channels.
Impact on Fintechs and Payment Providers
PL 5.473/2025 also increases social contributions (CSLL) for financial entities tied to betting operations. From 2026, payment institutions will see CSLL rise from 9% to 12%, reaching 15% in 2028, while credit and investment fintechs move from 15% to 17.5%, then 20% over the same timeline. Banks retain their current 20% rate. This additional burden may influence service fees and overall operator costs.
Next Steps
With CAE approval complete, the bill now advances to the Chamber of Deputies. It will be assigned to relevant committees before a floor vote. Any amendments require a return to the Senate; if approved as is, it will proceed to the president for sanction or veto.
