Brazil president approves gradual tax rise on gambling operators

President Luiz Inácio Lula da Silva has signed Complementary Law No. 224, confirming a phased increase in tax on licensed betting operators from 12% of gross gaming revenue today to 15% by 2028, while tightening sanctions on those linked to illegal gambling.

Brazil.- The country has locked in a higher long-term tax burden for licensed betting operators after President Luiz Inácio Lula da Silva signed Complementary Law No. 224 at the turn of the year. The law, based on bill PLP 128/2025, raises the federal levy on licensed gambling licensees from the current 12% of gross gaming revenue (GGR) to 13% in 2026, 14% in 2027 and 15% from 2028 onwards.

Although the law formally entered into force with the new year, Brazil’s constitution imposes a 90-day “noventena” before any new or increased tax takes effect. This means operators will continue to pay 12% on GGR in the short term, with the 13% rate expected to apply from early April 2026 once the waiting period has elapsed.

Complementary Law No. 224 forms part of a wider fiscal package that cuts federal tax benefits across several sectors by 10% while seeking extra revenue from the fast-growing online betting market. From 2026, 1% of revenue collected by licensed betting companies must be earmarked for Brazil’s social security system, rising to 2% in 2027 and 3% in 2028, adding a dedicated social funding layer on top of the headline GGR rate.

The legislation also strengthens enforcement tools against the black market. It introduces joint tax liability for companies and institutions that support illegal betting, including media outlets and affiliates that advertise unlicensed operators, as well as financial and payment service providers that process their transactions. Authorities hope that by penalising those who facilitate unregulated gambling, they can reduce leakage from the regulated system and improve tax collection.

The final 15% rate is lower than earlier proposals examined in the Senate’s Economic Affairs Committee, where a separate bill (PL 5,473/2025) would have pushed the GGR tax as high as 18% by 2028. That draft stalled amid political resistance and industry warnings about channelisation risks, prompting the government to pursue the softer PLP 128/2025 route that has now been enacted. Even so, industry groups continue to flag concerns over cumulative tax pressure, especially with a separate 15% tax on player deposits still moving through Congress and yet to be definitively resolved.