Brazil edges towards gradual gambling tax rise after Senate approves measure

Senate vote moves bill closer to law

Brazil’s gambling market moved closer to higher taxes after a strong Senate vote. Lawmakers approved a bill that cuts tax benefits and raises betting taxes. The measure passed by 62 votes to six, showing wide political support.

The Senate vote followed approval by the Chamber of Deputies within one day — an unusually fast process. That pace added tension for operators already adjusting to new rules. Nevertheless, officials described the move as careful and planned.

The bill, known as PLP 128/2025, now goes to President Luiz Inácio Lula da Silva. He will decide whether the bill becomes law. If approved, most changes would begin in early 2026.

Tax rises spread over three years

The bill sets out a gradual rise in tax on gross gaming revenue. At present, licensed operators pay a 12% tax rate. That rate would increase step by step over three years. The plan includes the following changes:

• 13% tax rate in 2026

• 14% tax rate in 2027

• 15% tax rate in 2028

Wider rules target illegal activity

The bill also expands responsibility beyond betting operators — raising concern across the sector. Companies that advertise illegal betting sites could share tax responsibility. Payment firms working with unlicensed casinos may also face penalties.

Brazil’s constitution adds a delay to the tax changes. Any new or higher tax must wait 90 days after publication. This gives operators a short break before the 13% rate begins.

A softer outcome than earlier plans

Some in the industry see the final rate as a compromise — not the worst result. Earlier proposals aimed to raise taxes to 18% by 2028. Those plans stalled due to political delays and timing issues.

A separate bill to tax player deposits was also delayed until 2026. That measure could raise BRL30 billion for public security programs. Lawmakers chose to wait rather than rush the decision.

There is also talk of retroactive taxes covering 2018 to 2024. That issue remains sensitive and unresolved. For now, Brazil’s gambling sector faces a clear signal — higher taxes are coming, but slowly.