Brazil’s betting market got a reality check from the president of the country. Lula da Silva has signed a new bill that obligates betting companies to make higher contributions to the government for the next 3 years. The tax rate will be raised progressively from 12% to 15% by 2028. The operators are really not happy about it.
The new rules, formally known as Complementary Law No. 224, were finally signed last week. Both chambers of the Congress gave their consent to the December version. The government claims that they are trying to strike a balance between supporting the growth of the industry and increasing state revenues.
Currently, the betting companies are subjected to a 12% tax on their gross gaming revenue (this is the total money received minus winnings paid out). That figure will be 13% next year. Then 14% in 2027 and finally, in 2028, it will be 15%.
Since the legalization, the betting industry in Brazil has seen impressive growth, becoming the fifth largest sports betting market in the world within a year. In September, the government had collected tax revenues to the tune of about $612 million, while legal operators reported a combined total revenue of approximately $5.1 billion during the exact same period.
From 2026, these firms will have to contribute 1% of their turnover to social security. This will increase to 2% in 2027 and 3% in 2028. Additionally, the law targets those who aid the functioning of illegal betting sites, for instance, banks and payment processors that cooperate with unlicensed operators.
Having this law passed was not an easy task. Some senators expressed concern that the higher taxes could drive bettors to illegal sites. The ultimate rate of 15% is lower than the originally proposed 18%, hence the operators have benefited a little.
Due to Brazil’s tax legislation, the operators are granted a brief respite, as the new tax rates cannot be implemented sooner than 90 days from the publication of the law. Therefore, they still have the old 12% rate for a few more months before the step-ups start.
Editor-in-chief and creator Cole Smith of casinocurrencies.com, has extensive experience with casino payment systems, The site was created to provide an honest and trustworthy resource for online gambling players.