On December 2, Brazil’s Senate Economic Affairs Committee (CAE) approved an advanced bill, PL 5,473/2025, to gradually raise taxes on the gambling industry, with the highest rate set at 18% of Gross Gaming Revenue (GGR).
Brazil’s CAE Moves Forward with New Gambling Tax Legislation
Lawmakers approved the measure with a 23–1 vote, agreeing on a rate well below the initially proposed 24%. It’s also considerably lower than the 50% rate that had been previously considered. The proposal will now move to the Chamber of Deputies for further review, unless an appeal is filed to halt its progress in the Senate. The current 12% rate would increase to 15% in 2026 and 2027, before rising to 18% in 2028.
With a general election looming next year, President Lula’s government seems focused on raising gambling taxes to meet its fiscal goals. The administration recently faced a significant setback when its proposal to increase the gambling tax by 50% was rejected. Brazilian iGaming analyst Elvis Lourenço suggests that this defeat has led the government to make more urgent and persistent efforts to raise the tax rate.
He noted that this issue had become part of the election agenda, as it appealed to the public, particularly in a country with conservative values. By presenting the tax increase as targeting the “billionaires” of the gambling industry, it aligned well with the current government’s narrative.
Some Opposed the Legislation’s Older Versions
As we mentioned, initially the bill proposed taxing gambling operators at a rate of 24%. Senator Eduardo Braga warned that such a rate could lead to the illegal market gaining popularity. He expressed concern that the proposed increase, which would abruptly double the current rate, could harm already legalized companies. At the same time, illegal operators would continue to operate without consequence and without contributing to public finances.
Braga’s words were echoed by the Brazilian Institute of Responsible Gaming (IBJR), which also opposed a huge tax hike on gambling. Last month, when the bill was still in its early stages of development, the IBJR stated that the hike could deal a significant blow to legal gambling by alienating some operators and forcing them to exit the regulated framework.
With the new version of the bill, Brazil’s federal government projects it will raise BRL 18 billion (about $3.4 billion) over the next three years, with an estimated BRL 5 billion ($942 million) in 2026 and an additional BRL 13 billion (around $2.45 billion) between 2027 and 2028. Additionally, a portion of this revenue will be allocated to compensate states and municipalities for the loss in income tax revenue due to the exemption granted to Brazilians earning up to BRL 5,000 ($941).