Key Moments:
- Proposal aims to raise the fixed-odds betting tax rate in Brazil from 12% to 18%, with 6% dedicated to health programs.
- MP 1,303/2025 mandates prompt regulatory approval timelines and contains tough measures against illegal operators.
- An estimated R$4.8 billion in annual revenue could be allocated to Brazil’s public health system if passed.
Legislative Developments and Timelines
Federal Deputy Carlos Zarattini (PT–SP) has introduced his draft for Provisional Measure (MP) 1,303/2025. The proposal seeks to significantly raise the taxation rate for fixed-odds betting. The proposal would move the existing rate from 12% to 18%. Of the newly proposed tax structure, 6% would be earmarked entirely for health initiatives within the nation’s social security system.
Under the measure, the MP remains active until October 8, 2025. It requires approval from a special committee on September 30. If approved, it will move to the Chamber of Deputies and Senate for a decisive vote. If adopted, licensed betting operators will face strict monthly contribution collection, monitored by the Federal Revenue Service under the Ministry of Finance.
Resource Allocation Details
The proposed amendment would revise the financial allocation rules previously laid out in Law 14,790/23. Once statutory withholdings are applied, 82% of the gross proceeds would be set aside for operators and other gambling sector suppliers to cover operational and maintenance expenditures.
The remaining 18% would be split, with 6% directed at health, and 12% distributed among other key sectors such as social security, education, tourism, security, civil society, and sports. Notably, the Ministry of Sport’s share drops from 22.20% to 21.20%, while 1% would now be allocated to the Brazilian Military Sports Commission (CDMB), which functions under the Ministry of Defense, fostering military athletic development and integration.
| Recipient | Percentage | Change / Notes |
|---|---|---|
| Operators & Gaming Suppliers | 82% | For operating & maintenance costs |
| Health Programs | 6% | New earmark from tax increase |
| Other Sectors (Social Security, Education, Tourism, Security, Civil Society, Sports) | 12% | Remains, but Ministry of Sport reduced to 21.20% |
| Brazilian Military Sports Commission (CDMB) | 1% | Receiving dedicated share |
Enforcement and Integrity Measures
The draft legislation incorporates strict provisions to curb illegal gambling. Internet service providers must establish direct communication with regulators. This will ensure quick action against unauthorized platforms. The intention is to facilitate swift platform blocking and enhance the Ministry of Finance’s regulatory capabilities.
Banks and payment service providers would face new obligations to implement controls that prevent processing of transactions with unlicensed betting firms. The new rules broaden the scope of administrative offenses to include activities undermining fair sport, such as match-fixing and noncompliance with transparency standards. There will also be penalties for promoting or advertising unlicensed betting, targeting not just companies but also directors and media outlets.
Projected Economic and Social Outcomes
Preliminary calculations from the Ministry of Finance indicate that the tax rate hike from 12% to 18% could channel an additional R$4.8 billion annually to the public health sector. These resources are intended to improve both basic and specialized health services within the national SUS system. Funds are also expected to support initiatives tackling problem gambling, estimated to impact 2% of Brazil’s regular gamblers.
The Ministry of Health plans to work with specialized agencies to reinforce preventative and treatment programs for gambling addiction, extending protective outreach to vulnerable populations. This illustrates the proposal’s dual fiscal and social focus, seeking to limit the risks associated with gambling expansion while generating revenue.
Additional Fiscal and Social Provisions
The scope of MP 1,303/2025 extends into wider economic and welfare domains. The measure would eliminate existing tax exemptions on Real Estate Credit Bills (LCIs) and Agribusiness Credit Bills (LCAs), broadening government revenue sources. It also suggests expanded unemployment insurance for artisanal fishermen, furthering social protections.
Overall, MP 1,303/2025 reflects Brazil’s attempt to balance its revenue needs with social safeguards and regulatory integrity. If enacted, the reform could mark a significant shift in the country’s gambling tax framework, using fiscal tools not only for funding but also for upholding societal and sports sector standards.
- Author
Daniel Williams
