Key Moments:
- A new bill proposes doubling Brazil’s gambling tax rate to 24% of gross gaming revenue
- Industry experts warn the measure could damage growth and push activity toward unregulated markets
- Operators already face multiple layers of taxation, driving Brazil’s effective tax burden among the world’s highest
Escalating Tax Proposals Spur Uncertainty
Brazil’s gambling sector, which only recently entered a regulated era, now faces turbulence due to fresh legislative efforts aimed at increasing taxation. Under newly introduced bill PL 5,076/2025, lawmakers are considering pushing the gambling tax rate from 12% to 24% of gross gaming revenue (GGR). This follows an earlier, unsuccessful attempt to raise the rate to 18%.
Elvis Lourenço, managing partner at EX7 Partners, sharply criticized the initiative. He told iGB:
“24% is insane. It will collapse the market.”
Despite the potential for negotiation, Lourenço pointed out:
“So if you look for the best worst scenario, it is 15% at least, 18% maximum because that was on the first agenda.”
Political Agenda Shapes Tax Debate
Analysts attribute the pressure for higher gambling taxes to political motivations as national elections approach. According to Lourenço, the administration is using gambling taxation to appeal to conservative bases, grouping the gambling industry with billionaires and banks as part of a broader election narrative.
He described the latest bill as a rapid response to an earlier legislative setback, stating:
“This becomes an election agenda,” he said. “It’s good for the speech of the actual government.”
Operators Warn of Existing Tax Burdens
Industry representatives argue that the attention surrounding the proposed 24% GGR tax overlooks the full extent of Brazil’s existing tax structure for licensed operators. In addition to the current 12% GGR tax, companies must pay a 9.25% PIS/Cofins levy, local municipal taxes reaching up to 5%, and a 34% corporate income and social contribution tax on profits.
Lourenço maintained that drawing comparisons between Brazil and mature gambling markets like the UK or Spain does not reflect the unique local challenges.
| Tax or Levy | Rate |
|---|---|
| GGR Tax (current) | 12% |
| PIS/Cofins | 9.25% |
| Municipal Taxes | Up to 5% |
| Corporate Income & Social Contributions | 34% |
| Proposed GGR Tax (new bill) | 24% |
Neglect of Illegal Gambling Fuels Industry Frustrations
A major concern among regulated operators is the government’s lack of enforcement against illegal gambling, which experts believe represents more than half of Brazil’s total betting revenue.
According to Lourenço:
“They are targeting to increase the taxes but they are not targeting to combat illegal gambling. So you have more than 50% in the black market and they’re doing nothing to get this money that is circling through. Guys, let’s try to get some money from here [illegal gambling]. If we can lower 50% to 30%, well it’s done.”
Lourenço also argued that enforcement funding remains insufficient and called for more effective distribution of revenues to support public sectors like health and education.
Calls for Balanced Policy and Open Dialogue
As lawmakers weigh the timing of a vote on the proposed tax bill, industry leaders advocate for a negotiated compromise that supports both market sustainability and government interests. Lourenço emphasized that rates closer to 18% would align with prior discussions during regulation debates.
With tax policy, political pressures, and the enduring challenge of unlicensed operators all unfolding simultaneously, market participants are watching to see whether Brazil will prioritize immediate fiscal gains or longer-term sector stability and growth.
- Author
Daniel Williams
