On December 2, 2025, Brazil’s Senate Economic Affairs Committee (CAE) took a significant step in reshaping the country’s gambling taxation policy by endorsing a new bill aimed at incrementally increasing taxes on gambling operators. The proposed legislation, PL 5,473/2025, sets a cap on the gambling tax at 18% of Gross Gaming Revenue (GGR), a rate that marks a departure from the earlier, more aggressive proposals.
The CAE’s decision emerged from a decisive 23-1 vote, reflecting a unified stance among lawmakers for a more moderate tax increase than initially suggested. Initially, the proposal considered a 24% tax rate, which itself was a reduction from a previously mooted 50% rate that would have been one of the highest globally. The move to lower the initially proposed rate comes as a strategic response to both public opinion and economic considerations, balancing the need for increased revenue with the potential impact on the legal gambling market.
Under the new policy, the current tax rate of 12% will increase to 15% over the next two years, reaching the final rate of 18% by 2028. The legislation’s approval in the Senate is a prelude to its review at the Chamber of Deputies, where it will undergo further scrutiny unless contested by appeals within the Senate.
This legislative effort aligns with President Lula’s administration’s broader fiscal strategy, especially as the country approaches a pivotal general election. The administration’s previous attempt to implement a 50% tax increase was met with resistance, prompting a recalibration of its approach. According to Brazilian iGaming analyst Elvis Lourenço, this setback has intensified the government’s resolve to raise funds through more modest yet persistent tax negotiations.
The government’s narrative frames the tax increase as a step towards economic fairness, targeting wealthier segments of the gambling industry. This approach resonates with segments of Brazil’s population who hold conservative values, offering political capital as the election looms.
However, the path to reformed gambling taxation has not been without opposition. Earlier versions of the bill, particularly those proposing a 24% rate, faced criticism from figures like Senator Eduardo Braga. Braga cautioned that such steep increases might inadvertently boost illegal gambling activities by burdening legitimate operators while allowing unregulated entities to flourish untaxed. The concerns raised by Braga were echoed by the Brazilian Institute of Responsible Gaming (IBJR), which warned that drastic tax hikes could drive legitimate operators out of the market, undermining the integrity of Brazil’s regulated gambling industry.
As the bill advances, the Brazilian government projects that the new tax structure will generate approximately BRL 18 billion (around $3.4 billion) over three years. This revenue includes an estimated BRL 5 billion ($942 million) expected in 2026, with a further BRL 13 billion (around $2.45 billion) anticipated between 2027 and 2028. Crucially, part of this revenue will be used to compensate states and municipalities for lost income tax due to exemptions granted to Brazilians earning up to BRL 5,000 ($941).
This fiscal maneuver is not occurring in isolation. Globally, countries with burgeoning gambling industries, such as the UK and Australia, have faced similar challenges in balancing tax revenue with market sustainability. As these nations grapple with the potential social and economic impacts of gambling, Brazil’s approach offers a study in moderation and strategic adjustment to stakeholder feedback.
Despite the optimistic projections, the plan carries inherent risks. A significant concern is the potential for increased tax burdens to push operators into unregulated markets, diminishing the anticipated fiscal gains. Furthermore, there is the challenge of ensuring sufficient regulatory frameworks to curb illegal activities, a problem that has plagued other jurisdictions with similarly ambitious tax policies.
Overall, Brazil’s cautious approach to increasing gambling taxes highlights a pragmatic attempt to reconcile economic goals with industry health. As the bill continues its legislative journey, stakeholders from various sectors will closely monitor its impacts, both within Brazil and as a potential case study for other nations considering similar fiscal strategies in the gambling industry.
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.
