Key Moments:
- Senator Sérgio Petecão has proposed raising the fixed-odds betting tax rate in Brazil from 12% to 27.5%
- The planned increase would allocate 10% of the proceeds to healthcare and 17.5% to other public priorities mandated by law
- Senate committees will review the proposal before any full Senate vote takes place
Emergency Tax Hike on Betting Under Consideration
A new legislative proposal submitted to Brazil’s Federal Senate aims to temporarily increase the tax applied to fixed-odds betting operators – including both physical and online activity – from the current 12% to 27.5%. This measure, introduced by Senator Sérgio Petecão (PSD–AC), intends to provide stronger financial support for essential public programs in the period leading up to the full implementation of the upcoming Selective Tax as part of the nation’s tax reform process.
Revenue Distribution and Purpose
Under the bill’s terms, proceeds from the increased tax would be directed toward specific areas in the public sector. Specifically, 10% of the collected revenues would be dedicated to Brazil’s public healthcare system, with the remaining 17.5% allocated to other legally established public priorities. This temporary rate increase is designed to bridge the gap between the current tax framework and the introduction of the Selective Tax (Imposto Seletivo), which will ultimately focus on products and services that pose risks to health or the environment, including some forms of gambling.
Rationale Behind the Proposal
Explaining his motivation, Senator Petecão emphasized the rapid growth of the betting industry in Brazil and argued the need for more equitable taxation within this sector. He stated, “We need to tax. Those who want to play, let them play—but games have to pay their way“, adding, “Our submission raises the tax to 27.5%, 10% to health, and 17.5% to other lawful destinations.” The senator pointed to approximately 50 billion reais processed by the online gambling sector during 2023 and highlighted his belief that some of these proceeds should benefit social welfare.
Legislative Steps and Broader Context
The bill outlines a short-term measure to maintain public funding while Brazil finalizes the details of the Selective Tax. This larger tax reform, which has received constitutional approval in principle from Congress, seeks to simplify the national tax code and introduce new fiscal mechanisms aimed at sustainability and public health. The proposal now moves to a series of Senate committee reviews, specifically within the Economic Affairs and Social Affairs Committees, before any possible plenary vote.
| Current Tax Rate | Proposed Tax Rate | Healthcare Allocation | Other Public Allocations |
|---|---|---|---|
| 12% | 27.5% | 10% of collected tax | 17.5% of collected tax |
Significance of the Bill
If enacted, this proposal would represent one of the most significant temporary tax increases in Brazil’s gambling industry. By directly connecting gaming revenue to healthcare funding and other public priorities, the initiative exemplifies a broader shift towards using gambling taxation as a public benefit. The legislative process will determine whether this tax hike moves forward, reflecting ongoing efforts to balance economic interests with social responsibility.
- Author
Daniel Williams
