Brazil regulated its market on 1 January 2025 with gross gaming revenue (GGR) tax on operators of 12%.
But a little under a year later, there has been multiple attempts to alter legislation, the most recent being to raise taxes to 24%.
Initially, a proposal (Provisional Measure 1.303/2025) was made to increase the tax on GGR to 18%, but that was scrapped by Brazil’s Congress earlier this month.
In its place, a retroactive tax was debated which would suggested operators currently active in Brazil that were operational before January’s regulation, pay a 15% backdated tax.
Though this proposal was approved by Brazil’s joint committee, it failed in the Chamber of Deputies.
With a clear desire to make changes to legislation, but it being thwarted at every turn so far, EGR received reactions from Brazilian experts and lawyers on where things currently stand in the South American market.
Neil Montgomery – managing partner at Montgomery
“The rejection of PM 1.303/2025 by the Brazilian Congress, which would have seen the increase in the GGR contribution paid by licensed gaming operators in Brazil from 12% to 18%, is probably the first major victory of the industry since the regulated market opened on 1 January 2025.
“The industry can temporarily breathe a sigh of relief in this regard, since 2025 has been a very difficult first year of the regulated market amid attacks from many sectors, including government, congress and many sectors of the public society.
“But since Brazil is not for beginners, as one can say, the challenges continue to be tackled on a daily basis, with a new bill of law having been proposed by President Lula’s Workers’ Party to double the current rate of the GGR contribution, just days after the rejection of the PM 1.303/2025.
“It is a pity to see that the government and many politicians continue to regard the betting and gaming industry as the golden goose and solution for Brazil’s fiscal issues.
“Instead of aggressively combating the black market (which some say amounts to 50% of the total market) – mainly by blocking Pix transactions supporting unlicensed operators – the government insists in increasing taxes for operators, which only collaborates to enhancing the black market.”
Fernanda Meirelles – lawyer at FAS Advogados
“To begin with, it’s important to remember that betting was legalised in Brazil in 2018, but the actual regulation was only enacted in 2024 and became effective in 2025.
“During the five-year gap, operators were able to offer betting services freely in Brazil, without having to pay taxes or comply with any regulatory obligations.
“This situation has significantly shaped public perception and many Brazilians still associate betting with illegality, even though wagering has long been part of the country’s cultural and social life.
“Because of this, as well as other factors, some sectors of society believe that the betting industry has a ‘debt’ to pay, referring to the years during which operators did not pay taxes, even though there was no legal framework that allowed them to do so.
“This historical background helps explain why the betting sector is now being viewed as a convenient means for the government to increase revenue without having to cut public spending to balance next year’s budget.
“The recent PM 1.303/2025 that sought to raise the GGR back to 18% reflects not only this long-standing debate but also a broader fiscal strategy.
“The measure did not affect betting alone, it also included tax changes for other sectors, such as certain financial assets and agribusiness.
“As a result, the political discussions around its rejection cannot be attributed solely to the betting market, as its provisions affected various economic sectors, and the decision to overturn the measure was driven by a much wider set of fiscal and political interests.
“Unsurprisingly, new bills have already been introduced in congress seeking to increase only the GGR for betting activities.
“We will have to see how these proposals evolve in the coming months. In the end, more than the potential tax increase itself, the key issue for operators is the lack of predictability, which generates uncertainty for companies that have already structured themselves to enter the Brazilian market under the current framework and others considering establishing operations in Brazil.”
Caio de Souza Loureiro – lawyer at Tozzini Freire Advogados
“Brazil’s gambling market has experienced a brief relief after the government’s proposals were rejected, though further attempts to tax sportsbook operators are likely.
“Minister Haddad indicated the Ministry of Finance is still considering ways to impose retroactive taxes, and some congress members aim to propose higher GGR discounts, possibly up to 24%.
“Any new bill could emerge this year, but another provisional measure must wait until next year due to legal restrictions.
“Retroactive taxation encounters various legal and practical obstacles. Although these arguments may form the basis for disputing any governmental action in this area, it is unlikely they will fully deter further efforts to recover past taxes.
“Nevertheless, even if the government does not succeed in its objective, the mere attempt itself can have negative consequences, as it sends an unfavourable signal to current operators and potential entrants into the Brazilian market.
“Unfortunately, the current situation is likely to persist due to ongoing political disputes, including debates over the government’s efforts to raise revenue by targeting the betting industry for taxation.
“At the same time, the regulator still lacks sufficient authority to enforce restrictions on the illegal market, hindering progress toward social acceptance. This creates a cycle that ultimately benefits illegal operators.
“Political instability in Brazil may prompt legal operators to leave, giving illicit firms a chance to expand.
“Although sportsbook operators currently remain active, further challenges lie ahead. The industry must advocate for legal stability and stress the drawbacks of higher taxes on regulated businesses.
“Effective regulation has helped the market grow, but the government should resolve policy contradictions and fully recognise the sector’s benefits.”
Ramiro Atucha – Latam igaming expert
“Brazil’s plan to raise gaming taxes so soon after implementing regulation risks undermining the very market it seeks to strengthen.
“While funding for health, sports and social programmes is essential, sudden fiscal pressure and retroactive assessments could discourage investment, shrink the regulated sector and drive players toward unlicensed operators.
“True, sustainable growth will come not from squeezing compliant companies, but from allowing the legal market to mature – through stability, competitiveness and consistent rules that expand participation and ultimately generate far greater long-term revenue for the state.”
The post Industry reaction to chaotic week of tax debates in Brazil first appeared on EGR Intel.
Brazilian gambling experts tell EGR the recent rejection of raising GGR on operators to 18% is a win, but warn it will be just a ‘brief relief’ with a rise to 24% already on the table in congress
The post Industry reaction to chaotic week of tax debates in Brazil first appeared on EGR Intel.