Brazil’s regulated gambling market is facing a phased tax increase after President Luiz Inácio Lula da Silva signed Complementary Law No 224 into force. The legislation sets out a gradual rise in the tax rate applied to licensed gambling operators, lifting it from the current 12% of gross gaming revenue (GGR) to 15% by 2028.
The law received final presidential approval last week after being passed by both the Senate and the Chamber of Deputies in mid-December under its original bill number, PLP 128/2025.
Phased increases and social security allocation
Under Complementary Law No 224, the GGR tax rate for gambling licensees will increase incrementally: to 13% in 2026, 14% in 2027, and 15% from 2028 onwards. The legislation also requires operators to allocate a growing share of collected revenue to Brazil’s social security system, starting at 1% in 2026, rising to 2% in 2027, and reaching 3% by 2028.
The law forms part of a broader effort to reduce federal tax incentives across multiple sectors by 10%. It also introduces joint tax liability for entities that advertise illegal betting platforms, as well as for financial institutions and payment providers that transact with unlicensed operators.
While many provisions came into effect with the start of the new year, Brazil’s constitution mandates a 90-day waiting period for new or increased taxes. As a result, the higher 13% gambling tax rate will not apply immediately, giving operators a short adjustment window.
Lower than feared, but pressure remains
The final 15% rate is lower than the 18% level proposed earlier this month by the Senate’s Economic Affairs Committee under PL 5,473/2025. That proposal stalled after lawmakers attempted to return it to the Senate plenary for further debate, delaying progress until after the government recess.
Despite relief that the final rate settled below 18%, licensed operators remain concerned about additional fiscal pressure. In December, the Senate plenary approved a separate bill imposing a 15% tax on player deposits made to licensed platforms. Because the bill was amended, it will now return to the Chamber of Deputies for further review before any potential presidential approval.
Revenue from the proposed CIDE-Bets levy would be directed to the National Public Security Fund, with government estimates suggesting it could generate around BRL 30 billion (approximately US$5.5 billion) per year.
Separately, the recently revived Antifaction Bill has reinstated the RERCT Litígio Zero Bets mechanism, which requires operators to pay a 15% retrospective tax on gambling activity conducted between 2018 and 2024, prior to the market’s formal regulation on 1 January 2025.
What it means for the market
For licensed operators, the phased tax increase provides a degree of predictability, allowing financial models to adjust gradually rather than absorb an immediate jump. The fact that the rate capped at 15%, rather than 18%, will be viewed as a partial win in an already high-cost regulatory environment.
However, the broader tax picture remains challenging. The potential introduction of a deposit-based tax, combined with joint liability rules targeting advertisers and payment providers, increases compliance risk and could discourage ecosystem partners from engaging with the regulated market.
Legal experts have warned that cumulative tax pressure may undermine channelisation. Udo Seckelmann, head of gambling and crypto at Bichara e Motta Advogados, has cautioned that measures such as the CIDE-Bets tax could push channelisation to licensed operators below 20%.
At a strategic level, Brazil’s approach reflects a balancing act between revenue generation and market sustainability. Whether the regulated sector can absorb the rising burden without driving players back to offshore platforms will depend on how aggressively additional taxes are pursued and how consistently the rules are enforced in the coming years.