Brazil Approves Phased Tax Increase for Betting Operators

After months of debate, a new law sets a clear multi-year schedule that raises costs while expanding enforcement reach across the betting ecosystem.

The changes reshape how operators plan revenue, compliance, and partnerships. Even with some relief compared to earlier drafts, the framework signals a tougher operating environment ahead.

Good to Know

• Brazil approved a phased gambling tax increase through 2028
• Social security contributions will rise alongside headline taxes
• Advertisers and payment firms now share liability for illegal betting

Presidential approval finalizes tax roadmap

President Luiz Inácio Lula da Silva granted final approval to Complementary Law No. 224 after passage in both the Federal Senate of Brazil and the Chamber of Deputies of Brazil in mid December.

The law raises taxes on licensed gambling operators in stages. Rates move from 12 percent today to 13 percent in 2026, 14 percent in 2027, and reach 15 percent starting in 2028. The measure forms part of a broader fiscal package that trims federal tax incentives across multiple industries by 10 percent.

Social security payments add another layer

Beyond headline taxes, the legislation introduces mandatory revenue allocation to the social security system. Gambling companies must direct 1 percent of collected revenue to social security beginning in 2026.

That obligation increases to 2 percent in 2027 and climbs again to 3 percent by 2028. For operators, the combined effect raises total effective taxation well above the headline gaming rate over time.

Liability expands beyond betting platforms

Complementary Law No. 224 also widens accountability across the gambling supply chain. Companies and institutions that support illegal betting now face joint tax liability.

The rule covers advertisers that promote unlicensed platforms as well as banks, payment processors, and financial service providers that transact with operators lacking authorization. The shift aims to restrict unregulated activity by targeting infrastructure rather than only betting brands.

Timing offers a brief pause for operators

Although many provisions took effect at the start of the year, the Brazil constitution requires a 90 day waiting period before new or higher taxes apply.

That delay gives licensed operators a short window before the 13 percent rate becomes enforceable, offering limited time to adjust systems and pricing.

Earlier proposal aimed higher but stalled

The final 15 percent rate landed below a previous plan approved by the Senate Economic Affairs Committee earlier in December. That proposal sought to raise operator taxes to 18 percent by 2028 under PL 5,473/2025.

Resistance from lawmakers concerned about pace and impact slowed that route. To avoid delays ahead of the legislative recess, the government pivoted to PLP 128/2025, which ultimately became Complementary Law No. 224.

Revenue from the new CIDE-Bets levy will flow into the National Public Security Fund. Officials estimate the tax could generate around BRL 30 billion, or roughly $5.5 billion, per year.

The allocation reinforces the government link between gambling taxation and public safety spending.

Retroactive tax returns through litigation settlement

Alongside the new law, lawmakers reinstated the RERCT Litígio Zero Bets mechanism through the Antifaction Bill. The measure requires operators to pay a 15 percent retrospective tax on gambling activity between 2018 and 2024.

That period covers years before formal market regulation began on January 1, 2025, adding a backward-looking cost for companies that operated in earlier phases.

Deposit tax proposal still unresolved

Even with relief over the lower operator rate, industry pressure remains. The Senate plenary recently approved a separate bill that would impose a 15 percent tax on player deposits made to licensed platforms.

Because amendments were added, the proposal returned to the Chamber of Deputies and still awaits further review before reaching the president desk.

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