.svg)
A sharp increase in the main tax applied to online betting in Brazil became a reality late Wednesday when an emergency decree was published in the Brazilian government’s official gazette.
Article 61 of Provisional Measure 1.303/2025 amends a 2018 federal law on fixed-odds betting to allow licensed operators to retain 82 percent rather than 88 percent of their gross revenues, with the additional 6 percent being directed to social security and public health programs.
As a so-called provisional measure, the executive decree immediately becomes effective, but it will have to be approved by both houses of Brazil’s Congress within a window of no more than 120 days, or its provisions will expire.
However, the higher tax rate of 18 percent for fixed-odds betting will not be effective until October 1.
The tax increase had been anticipated for a number of days, after Brazil’s government confirmed it would propose higher taxes on online betting as one revenue-raising alternative to its unpopular move last month to increase taxes on international financial transactions.
Brazilian operators have since been at pains to point out that they are already subject to a high fiscal burden under Brazil’s nascent regulatory regime, with their remaining 88 or 82 percent of gross revenues also subject to additional federal taxes of 9.25 percent plus local taxes of 2 percent for operators based in the major cities of Sao Paulo and Recife but up to 5 percent for other Brazilian municipalities.
Operators also must pay a monthly regulatory fee and other Brazilian corporate taxes that are applied to their profits.
In a statement expressing its “vehement indignation” to Wednesday’s provisional measure, Brazilian industry association IBJR said its members would “seek all means to defend the regulated market, including resorting to the courts”.
IBJR noted that dozens of operators agreed barely five months ago to pay R$30m (roughly US$5.3m) for a federal licence and structured their operations based on the 12 percent tax rate as established by a December 2023 law.
“This proposal does not solve the government’s tax collection problem and will have the opposite effect: by increasing the betting tax, the illegal market is likely to grow from the current 50 percent to at least 60 pecent, generating an estimated loss of more than R$2bn in revenue per year,” added the group, whose members include bet365, Betano, Entain, Flutter and Betsson.
“The way to increase revenue collection is not to penalise those who operate within the law, but rather to rigorously combat illegality and protect bettors through the industry’s regulations.”
New Enforcement Mechanisms
The increased tax rate is not the only legal change made by Wednesday’s provisional measure, however.
In addition, the emergency decree amends Brazil's December 2023 law to strengthen enforcement against the illegal market.
Per Article 70 of the decree, Brazilian ISPs and app providers will now be legally obliged to maintain a direct channel of communication with Brazil’s federal gambling regulator in order to respond quickly to any demands to block illegal operators.
The provisional measure also strengthens restrictions on payments by introducing new administrative penalties for providers that process transactions for illicit operators. It further obliges payment companies to adopt formal internal processes to prevent illegal transactions and to share required information with the Brazilian regulator when any unauthorized operators or intermediaries are detected.
The decree also will apply penalties not only to companies operating online betting without a Brazilian licence, but also anyone who “carries out, either directly or indirectly, any form of advertising or promotion in either physical or digital media for an operator that conducts any activity related to fixed-odds betting without due authorisation”.
Those legal changes regarding website-blocking, payments and illegal advertising are all effective immediately.
Contrary to a Brazilian newspaper report from earlier Wednesday, the provisional measure does not include any additional advertising restrictions for licensed operators.
A bill to set stricter rules on advertising was passed by Brazil’s Senate two weeks ago but still must be considered by the lower house or Congress.
