Brazil Senate committee approves 15–18% tax hike on betting operators

Brazil’s Senate Economic Affairs Committee (CAE) on Tuesday approved a proposal to gradually increase taxes on sports betting and online gaming operators, setting a 15% rate for 2026 and 2027 before rising to 18% from 2028. The measure passed by 21 votes to 1 and now moves to the Chamber of Deputies.

The phased system is a revision of Bill 5.473/2025, introduced by Senator Renan Calheiros, which initially sought to lift the betting tax on gross gaming revenue from 12% to 24%. Rapporteur Senator Eduardo Braga pared the proposed increase to 18% and recommended implementing it over two stages.

Under the proposal, revenue from the higher tax will be directed to social security programmes, with priority given to health initiatives. Between 2026 and 2028, part of the proceeds may also be transferred to states, the Federal District and municipalities to compensate for losses tied to income tax exemptions for civil servants.

The committee also approved additional tax changes, including higher taxation on fintech profits and an increase in the income tax applied to distributions of Interest on Equity. The adjustments partially restore elements of an earlier government plan intended to raise revenue after abandoning an increase in the IOF financial transactions tax.

The report introduces measures to curb illegal betting by operators that have not received authorization from the Finance Ministry’s Secretariat of Prizes and Betting. It instructs the government to adopt “effective procedures” to take down unauthorized websites and requires payment and financial institutions to provide information on transactions linked to irregular companies.

The Brazilian Institute of Responsible Gaming (IBJR), which represents 75% of the country’s licensed betting firms, welcomed the stronger stance against illegal operators but criticized the tax hike. “Raising the tax burden on betting companies operating under the regulation of the Secretariat of Prizes and Betting does not strengthen the newly regulated sector,” the group said. “On the contrary: it encourages the growth of the clandestine market, reduces the competitiveness of licensed companies and, ultimately, puts the consumer at risk.”

If the Chamber of Deputies approves the bill without changes, it will be sent to President Luiz Inácio Lula da Silva for sanction.