Key Moments:
- The Workers’ Party introduced Bill PL 5,076/2025, proposing a 24% tax on gross gaming revenue.
- This new initiative emerged one day after a previous gambling tax reform proposal was withdrawn in Congress.
- The bill allocates half of the new tax revenues to social security and public health, with the remainder supporting sports, culture, and social projects.
Proposed Tax Hike Gains Urgency After Recent Legislative Defeat
Brazil’s government is rapidly pursuing its goal to increase gambling taxation. After the unsuccessful attempt to pass Provisional Measure 1,303, which would have raised the gambling tax rate from 12% to 18%, Lindbergh Farias of the Workers’ Party presented Bill PL 5,076/2025. This bill aims for a steeper increase, setting a 24% tax on gross gaming revenue. The legislative push comes in the wake of a failed reform, underscoring the administration’s commitment to securing new funding avenues.
Government Targets Social Investment Through New Gambling Tax
Unveiled on 9 October, the new proposal represents a strategic effort to underpin Brazil’s public spending agenda. Under PL 5,076/2025, half of the tax income would be funneled toward social security and public health initiatives, while the rest would go to sports, culture, and various social projects. Farias cited data from a 2023 Comscore study indicating that Brazil is a major player in global betting activity, highlighting the need for heightened regulation and fiscal measures. The bill text states: “This growing increase in bets and the number of bets is accompanied by several social and economic problems.”
Policy Focus: Addressing Social and Economic Risks
The initiative positions the tax increase not just as a source of revenue, but also as a measure to address gambling-related harms. Supporters characterize the reform as essential for both moral and fiscal reasons. Farias expressed concern over the dangers of gambling addiction, referencing its effects on mental health and family finances. The legislation underscores rising debt and addiction as key justifications for government intervention. According to the bill, “This proposed law increases Brazilian taxation on betting to a higher level than the average for other activities – which is justified by the fact that betting is an activity that is harmful to health and the family economy.”
Though the proposed rate is significant, its advocates argue that Brazil would still fall below the tax levels seen in France and Germany, leaving possible space for future fiscal adjustment.
| Tax Proposal | Previous Rate | Failed Proposal Rate | Current Proposal Rate |
|---|---|---|---|
| Gross Gaming Revenue Tax (%) | 12% | 18% | 24% |
Political Stakes for the Workers’ Party and Lula’s Economic Plans
The effort comes at a politically sensitive time, as the Workers’ Party seeks to rebound from the earlier setback in tax reform. The withdrawal of PM 1,303 signaled challenges in uniting legislators behind President Luiz Inácio Lula da Silva’s fiscal policies. The government’s earlier veto of a retroactive tax measure on pre-regulation operator revenue also created shortfalls in projected income from the betting sector.
With Bill PL 5,076/2025, the ruling party attempts to regain its fiscal footing and galvanize support before the next round of budget negotiations. The bill is seen as a barometer for internal cohesion within the governing coalition, especially as gambling tax reform reflects broader debates between economic priorities and social policy.
Industry Reactions and Implications for the Brazilian Market
Operators have voiced early concerns that the proposed doubling of the tax rate could impact the profitability of Brazil’s newly regulated gambling sector. While formal responses from industry groups are pending, local operators express apprehension that a 24% GGR tax might constrain investments in marketing, technology, and responsible gambling programming.
Market analysts observe that Brazil’s regulated gaming market is still in a formative phase, and that major shifts in taxation could impede new entrants. Some stakeholders argue that advancing enforcement and proper channelization should precede any further tax hikes. Nevertheless, proponents of the legislation maintain that industry profits have outpaced regulatory oversight, elevating the need for corrective fiscal action.
What Lies Ahead: Evaluating Brazil’s Approach to Gambling Taxation
The path forward for Bill PL 5,076/2025 will reveal how Brazil balances revenue generation with the health of its regulated gambling market. Should the bill become law, Brazil would rank among the highest-taxed gambling jurisdictions in Latin America. The central challenge remains: lawmakers must weigh fiscal objectives against the imperative to foster a sustainable and compliant betting landscape. The ongoing debate aims to determine whether increased taxation can curb gambling-related social harms without destabilizing the market’s growth.
- Author
Daniel Williams
