Brazil Raises Betting Taxes and Remains Cautious on Casino Legalization

Brazil recently reevaluated its approach to gambling reform as lawmakers moved decisively to adjust betting taxes while refusing to fast-track the long-debated legislation that would legalise land-based casinos. These decisions reveal a cautious political mood. While Brazil is eager to access increased gambling tax revenues, significant structural change requires more careful deliberation.

Operators Can Expect Significant Tax Hikes

The Brazilian Senate passed bill PLP 128/2025 by a wide margin of 62 to 6. The proposal reduces federal tax incentives in several sectors while gradually raising taxes on fixed-odds sports wagering. The changes will be felt immediately. Licensed operators face a10% reduction in tax incentives, split evenly between 2025 and 2026, which raises their costs even before the tax hike.

The tax on gross gaming revenue (GGR) for sports betting will rise from the current rate of 12% to 13% in 2026, then to 14% in 2027, and finally to 15% in 2028. Although the final rate is lower than the 18% target previously discussed by the Senate’s Economic Affairs Committee, it still represents a significant increase.

The government pledged to assign some of the additional revenue to social security and public health initiatives. Lawmakers framed the bill as a matter of accountability. They argue that lax oversight on tax incentives has led to distortions that strain public finances. With Senate approval secured, the bill now heads to the desk of President Luiz Inácio Lula da Silva.

Land-Based Casinos Are Still Far Off

Despite the Senate’s decisive support for the tax hikes, the future of physical gambling venues remains highly contentious. Lawmakers dismissed the idea of fast-tracking the bill PL 2.234/2022 by a vote of 36 to 28. This proposed legislation would legalise casinos, bingo halls, jogo do bicho, and regulated horse-race betting.

The rejection means the bill will proceed according to the standard legislative process. The proposal already passed the Chamber of Deputies and received favorable reports. However, resistance remains stiff. Opponents, led by the Evangelical Caucus, warned that land-based gambling risks fuelling addiction and facilitating crimes such as money laundering and human trafficking.

Senator Eduardo Girão called the proposal deeply polarizing and cautioned that economic promises must not eclipse social costs. Meanwhile, proponents argue that casinos could boost tourism and generate much-needed tax revenue, particularly in struggling regions. The Brazilian government appears to favor a balanced approach, prioritizing financial realism over comprehensive changes.